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OC leads the pack with a stonking 47% PEP boost, as early results show most top firms returning to growth
Predictions of market revenue growth have been borne out by the first 25 UK 200 firms to publish figures for the financial year.
All but Hill Dickinson have pushed up turnover, although it has hardly been a disastrous year at the Liverpool firm. Revenue was down by just 0.8 per cent, from £112.8m to £111.9m. Average profit per equity partner (PEP) was up by 3 per cent, from £264,000 to £272,000. That said, the firm restructured in 2013/14. There were two redundancy rounds and a £2.8m cash call after it spent £2m on a new practice management system and saw property overheads rise.
The key indicator will come when the firm reveals its net profit, which will establish what pressure has been applied to its margin.
Like Hill Dickinson, Nabarro had relatively flat revenues, up by 0.3 per cent, from £116.3m to £116.7m, while PEP showed double-digit growth – up by 10.5 per cent, from £430,000 to £475,000. This is indicative of a wider trend, with PEP growth outstripping revenue growth at 12 of the 13 firms that have published the figure.
At Clyde & Co, revenue rises are nothing new and 2012/13 saw turnover increase by 8.5 per cent, from £336.6m to £365.1m. However, the firm appears to be a fan of conservative PEP growth. Chief executive Peter Hasson predicts PEP growth of 3.45 per cent, from £580,000 to £600,000. Between 2004/05 and 2013/14 the figure has grown by 30.4 per cent, from £460,000 to £600,000.
Clydes is not the only firm to take a cautious view of PEP in recent years. At Allen & Overy (A&O) PEP stood at £1.12m, a 7 per cent rise on the previous year’s £1.05m.
While A&O’s net profit has grown every year since 2010, from £429m to £532.1m, PEP has been all but flat since 2010 until now. This appears to have been caused primarily by the economic slump. In 2006/07 PEP at A&O climbed by a massive 30.1 per cent, from £788,000 to £1.025m.
Elsewhere, Osborne Clarke (OC) is surging ahead. It has produced the biggest growth of the year so far, with turnover up by 25.9 per cent, to £142m, and PEP rocketing by 46.6 per cent, from £350,000 to £513,000. It has been a decade of growth for OC, with revenues sprouting from £64.6m in 2003/04 to £142m – up 120 per cent. Partnership headcount has seen a similar transformation, up by 95.7 per cent, from 92 to 180.
In PEP increase terms the only firm that comes close to OC is Berwin Leighton Paisner, which saw its numbers bounce back from a 10-year low in 2012/13. The firm upped revenue by 5.6 per cent, while PEP jumped by 35.2 per cent.
Early signs are that the UK 200 sector is back in growth mode.