The Ince Group PLC has disposed of the first business it acquired after listing as it looks to focus on its core legal practice.
CW Energy (CWE), a corporate tax consultancy to the oil and gas industry, joined the group in November 2017 for an initial consideration of £4m, payable in cash over five years.
More was payable depending on performance in that time, plus further payments on fees earned between the fifth and 10th anniversaries of completion. The total consideration was capped at £8m
However, CWE has now been passed back to the two original vendors on the basis that Ince is no longer be liable to pay them £2.9m of deferred consideration.
The AIM announcement said: “This disposal forms part of the board’s strategy of focusing on developing the group’s core legal services practice, disposing of non-aligned businesses within the group, and de-leveraging the group’s balance sheet.
“The disposal of CWE is the group’s first disposal since the completion of its recent fundraise and forms part of the cost rationalisation programme referred to in the share placing circular published in July.”
In the year to 31 March 2021, CWE delivered gross revenue of £2.5m and profit of £300,000 after deducting group charges and deferred consideration earned in that period.
Ince said: “Opportunities to expand CWE’s revenue base within the group have been explored but the board has concluded that it will not be possible to deliver significant revenue increases or synergies, and savings in CWE’s underlying cost base have not been identified.
Ince group chief executive Donald Brown said: “The disposal of CWE is the first move in aligning our businesses to ensure that we can develop our core legal services practices together with clear cross-selling opportunities within the wider group.”
It has been a tough period for the Ince Group, with the £9.3m fundraise undertaken to ward off financial problems, while this week it announced that former chief executive Adrian Biles – the man who took what was then Gordon Dadds onto AIM – was removed as a director with immediate effect, “as a result of circumstances which may give rise to a conflict of interest” between him and the firm.
The group’s shares are currently trading at an all-time low of 4.4p.