While the acquisition in December last year has boosted the firm’s turnover by 7.3 per cent to £185m, profits available for distribution to partners have plummeted 59 per cent from £20.6m in 2014/15 to just £8.4m last year. Irwin Mitchell group chief executive Andrew Tucker said that the firm was prepared to the profit downgrade, and backed the decision to take on a short-term financial hit: ‘The board took a deliberate decision to fast-track in the integration of Thomas Eggar which has led to a short-term impact on profitability in F716, but which we view as being the right decision longer term to enable us to maximise the return on synergies between Irwin Mitchell and Thomas Eggar as soon as possible,’ he said.
New borrowing for merger
The LLP accounts also reveal that Irwin Mitchell took on £29m worth of new borrowing through its existing bank lending facility to fund the acquisition deal, which was valued at £23.6m. Irwin Mitchell has been working to bring down its borrowing in recent years, achieving a more than 50 per cent reduction in total borrowing from £14.8m to £6.6m in the 2014/15 financial year. The merger between the two firms was the largest in Irwin Mitchell’s history, securing six new offices and deepening its foothold in the private wealth sector. Irwin Mitchell now boasts one of the top five private wealth teams by headcount in the United Kingdom.
Sources: The Lawyer; Legal Business
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