Problems with reopening its London headquarters have “hindered the development” of listed law firm Ince’s business, chief executive Adrian Biles told investors yesterday.
His comments came as the firm announced turnover of £100m for the year to 31 March 2021, a 4% increase on the previous year.
Operating profits tumbled 59% to £3.1m, however.
The results showed that, with UK turnover actually falling 5% to £59m due to the impact of the pandemic, it was Ince’s international operation that drove the growth, with income up 20%.
Shipping and trade, the firm’s main practice area, saw turnover up 8.6% to £61m, but income dipped for three of its other four main practice areas – dispute resolution, corporate and tax, and family and private client. Real estate went up.
Mr Biles said: “In the UK, all of our offices have been completely closed for a number of periods of the year and in particular our main London office has proved impractical to open for working.
“This has undoubtedly hindered the development of the business in acquiring new clients and freely interacting with existing clients.
“It has also hindered the interactions between colleagues from which business ideas and opportunities arise and the very important development of our trainee and junior lawyers.”
In the rest of the UK and around the world, the firm’s offices were all now open for “relatively normal working”.
The greater degree of working from home for staff in the London office in future means it is only reopening one of the two floors Ince occupies in Aldgate Tower.
“Unless we can sub-let that space in the meantime, we will exercise our tenant’s break to terminate the lease on that floor in October 2022.”
Mr Biles said Ince’s strategy remained focused on growing and acquiring revenue through “organic growth, lateral hires and, where appropriate, acquisition and to administer that revenue through a single efficient administrative operation in a low-cost environment”.
He continued: “We have the ambition to develop a highly profitable and fast growing international legal and professional services group and have the structure and teams in place to achieve this as circumstances allow.”
This meant during the year establishing a new maritime business in Cyprus, a new asset finance business in the Middle East, entering a strategic cooperation agreement with leading Chinese firm W&H Law Firm, and taking full control of James Stocks & Co Ltd, an corporate finance advisory business.
Ince is also working to integrate the private client and family offerings with its wealth management and employee benefits businesses. It can now offer professional trustee services and fund administration in Gibraltar, “which is an important capability in the private wealth offering”.
Mr Biles predicted that, as restrictions ease and the courts resume normal service, “the UK will return to growth”.
Ince has scaled back its dividend policy, adopting a “medium-term policy” of distributing 20% of post-tax earnings to shareholders each year; other listed law firms tend to target 70%.
Outgoing group chairman David Furst said: “We believe that this should enable shareholders to earn a good income return on their investment while enabling the group to retain sufficient cash to support a growing business to generate capital value.”
But the company will not be declaring a dividend for 2020/21. “While the balance sheet is now robust with adequate facilities available, there are still a number of liabilities which will unwind over the coming months. Growth will also require funding,” said Mr Furst.
Ince expects to pay an interim dividend after its next half-year results.
Non-executive director Simon Howard, a recruiter, will take over as chair in September, while Carol Ashton, former international HR director at DLA Piper, and former Freshfields chief financial officer Laurence Milsted have been appointed new non-executive directors.