29 Jul 2022

Ince CEO to step down as firm reveals 'financial difficulties'

Listed firm announces plans to raise £8.6m through new shares and a bank loan as it seeks further cost savings

Adrian Biles Ince

Top 50 UK listed law firm Ince is parting company with its chief executive and embarking on an £8.6m fund raising as it responds to ‘financial difficulties’ fuelled by the impact of Covid-19, Russia's invasion of Ukraine and a costly cyber attack. 

Under the plans, announced in a statement to London's stock market yesterday (29 July), Adrian Biles will step down once the fund raising is completed and make way for Donald Brown, who is currently executive director and CEO of Arden Partners, a corporate advisory business acquired by Ince in April. 

The firm said it would raise the cash through the issuance of £7m of new shares and a £1.6m loan. It blamed its difficulties on a ‘resurgence’ of Covid-19 in the UK last November, the pandemic's impact on its China business, the Ukraine war's stifling of its key shipping market, and the cyber attack.

Although the attack ‘principally affected non-client data and internal systems’, the firm had to revert to manual billing for a key period in its final quarter and currently estimates its cost at £4.9m.

The ‘cash impact of these events and their consequences mean that the group continues to operate at the limit of its borrowing facilities’ and was ‘unable to make a short term repayment’, the statement said.

‘Without the fundraising the group will face financial difficulties and the company will need to look to alternative sources of funding in the short term, which may not be readily available or so advantageous to the group or its shareholders’.

The firm said it would continue a cost cutting programme that had already achieved £2.2m of annualised savings ‘from property rationalisations, headcount reductions and reducing overheads’.  It said there was ‘potential for a reduced overseas footprint, review and rationalisation of non-core business streams, further property rationalisation and headcount reductions and tighter control of overhead costs’. 

Ince, a well-known shipping firm, was acquired by listed firm Gordon Dadds in December 2019 after it went into administration and the group is now intent on building a ‘world-class business advisory group’ having adopted the Ince name.

In the 2020/21 financial year  it recorded a 59% fall in operating profit to £3.1m after incurring a series of ‘non-underlying’ Covid-19 related costs, including £3.2m associated with the permanent closure of one of the two floors at its London headquarters. 

However, it narrowly missed its revenue target for the 2019/20 financial year, the first for which it posted a full set of results for the whole Ince group, with revenue clocking in just shy of its £100m target at £98.5m.

The firm is expected to announced its 2021/22 results in September, putting the delay down to the cyber attack. It issued a profit warning in May. Its share price has fallen by more than 50% since yesterday's announcement. 

Ince's difficulties bear some parallels with the situation faced by DWF at the start of the Covid-19 pandemic when its then chairman, Sir Nigel Knowles, replaced long-standing chief executive Andrew Leaitherland after a profit warning. 

There followed several cost cutting rounds that included overseas office closures and a major scaling back of its Australian business. Earlier this month, however, the firm posted a 3.6% revenue increase with  Knowles professing his ‘delight’ with the firm's progress. 

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