Acumen+giving+you+the+edge

A&O adds £21m to war chest after cashflow drive

7 September 2011 | By Matt Byrne

  • Print
  • Comments (5)

Related Articles

Allen & Overy (A&O) strengthened its cash position by £21m in the financial year 2010-11 thanks to a seven-day reduction in lockup, the gap between starting work for a client and being paid.

Allen & Overy (A&O) strengthened its cash position by £21m in the financial year 2010-11 thanks to a seven-day reduction in lockup, the gap between starting work for a client and being paid.

Finance director Jason Haines, writing in A&O’s annual review published this week, highlighted the firm’s more efficient working capital position. Haines said the improved cashflow position was the result of a reduction in lockup from 138 to 131 days.

“That seven-day difference has an important impact,” stated Haines. “It means we have something like an extra £21m of cash in the bank. That is cash we can use to make further investments in our future.”

A&O’s lockup is one of several revelations contained in its annual report, not all of which were investment related.

They include a £3m provision for the cost of redundancies related to the firm’s new support function in Belfast. In total, the new Belfast outpost cost A&O £4m last year.

Overall total costs rose by 6 per cent to £675m while one-off costs totalled £29m.

Profit before taxation remained broadly flat at £431m but profit available for division among the firm’s members dropped from £328.6m to £298m.

See all Related Jobs, Briefings & CPD/Events

Readers' comments (5)

  • Angry Tick | 7-Sep-2011 9:42 am

    Profits of £300m, so they decide to sack a load of workers in London so that they can make a sliver more profit in Northern Ireland.

    And even then A&O don't pay the redundancy costs. They get the taxpayer - including the sacked staff - to stump up £2.5m to relocation costs.

    Contemptible little men.

    Unsuitable or offensive? Report this comment

  • Ashley Balls | 7-Sep-2011 10:29 pm

    Reducing 'lock-up' from 138 to 131 days is not something to crow about. It is indicative of institutionalised behaviours concerning the provision of credit. Assuming the sum is approximately equally divided between unbilled WIP and debtors the message is clear; A&O are giving clients an average of nearly 4 and half month's free credit on every bill. Is this the way to run a large business? 90 days lock-up is an achievable goal. I am surprised the banking community hasn't reacted tooa competitor in their midst who provides free credit.

    Unsuitable or offensive? Report this comment

  • hmmmmm.... | 8-Sep-2011 9:40 am

    Angry Tick 9:42

    It's simple commercial logic. A&O don't have a responsibility to pay over the odds for people who choose to live and work in London when they can get the same service for less elsewhere.

    It's a profit making business and I'm sure the people of Belfast are pretty happy about it. There are other folk outside of London you know (including humans).

    Unsuitable or offensive? Report this comment

  • anon | 8-Sep-2011 4:49 pm

    "I am surprised the banking community hasn't reacted to a competitor in their midst who provides free credit"

    Ha. For the most part, it is the banks which are getting the free credit from their lawyers!

    Unsuitable or offensive? Report this comment

  • Provinces Tick | 9-Sep-2011 2:40 pm

    @ hmmmmmm...

    I know there are people outside London, I'm one of them.

    What I object to is that A&O will make money from this move - fine, that's their tickle, even though they're richer than Croesus they want more - but are getting the taxpayer to pay for it. I object to my hard-earned going to A&O partner pockets...and them getting the rewards...

    Unsuitable or offensive? Report this comment

Have your say

Mandatory Required Fields

  • Print
  • Comments (5)

Most popular

Most commented

Most emailed