Shares in listed law firm Ince Group tumbled by 10% yesterday after revealing that its UK operation was not performing as well as its overseas offices – even though revenues overall are up.
The share price slumped to 21.8p, having started the year at 115.8p but then crashed after a share placing in February.
A trading update said revenue from 1 April to 31 August was ahead of the same period last year. All of the overseas offices are performing better than a year ago, with improving gross margins and “all are now achieving a positive contribution to the group”.
But it continued: “The UK has not performed as well as the impact of Covid-19 has limited activity in, particularly, the aviation, real estate and corporate sectors, in part offset by more stable levels of activity in both shipping and dispute resolution.”
There have been 50 redundancies of fee-earners and support staff in areas “where it is not expected that business will recover sufficiently in the medium term”.
The group’s cash holdings at 31 August were £4.9m – down from £5.3m five months ago – while net debt has fallen from £9m to £8m.
The group remained on track “to achieve the board’s expectations”. The update said: “The board remains focused on cash management and the group remains well positioned for business to return quickly when normal trading conditions resumes.”
Abroad, Ince’s Singapore office has joined forces with local firm Incisive Law, “which significantly improves the viability of that office”, and it is opening an office in Cyprus to add to the firm’s maritime practice.
The board said that changing working practices may mean the group’s current office space may be too large or no longer suitable, and all of its long-term leases have a break clause within the next three years.
“Overall the business continues robustly with adjustments to the cost base being continuously made and numerous short and medium term cost saving opportunities identified for action.
“The group is therefore poised to weather the challenges of the current market conditions and uncertainties and to perform strongly once more normal circumstances return.”
Ince Group cancelled its interim dividend back in March because of Covid-19 and said yesterday that it did not intend to re-introduce dividend payments at the time of the half year report.