Bird & Bird net debt rises after refinancing

Bird & Bird’s borrowings rose by 22 per cent last year after the firm carried out a refinancing, increasing its total bank facilities to €59m (£44m) at the end of 2014/15 from €48.4m the previous year.

The increase in borrowings, set against a slightly lower increase in cash, meant that Bird & Bird’s net debt rose by 21 per cent from €38.3m in 2013/14 to €46.3m, according to LLP accounts filed at Companies House.

The firm refinanced in November 2014, increasing net current assets by more than 100 per cent. At the same time it renegotiated its working capital facilities, restructuring the borrowings to a combination of an unsecured revolving credit facility and overdraft. The credit facility is committed until November 2017, with an option of increasing until November 2019.

Chief financial officer Paul Colvin said the refinancing had reduced Bird & Bird’s margin and bank fees, relaxing its covenants and limiting its counterparty risk.

“We believe we remain very conservatively financed with net current assets of over €100m at 30 April 2015 (more than doubling compared to the prior year) and net assets after long-term borrowing increasing by almost 9 per cent at the same date,” Colvin added.

He said the firm had headroom of over £20m against the facility limit at the half-year point in the current financial year, which gave Bird & Bird “significant capacity” for continued investment if the opportunity arose.

The accounts confirm that Bird & Bird’s turnover rose last year, by 10.6 per cent in euros, from €308.m to €327.1m.

The firm had previously reported a 6.4 per cent increase in revenue in euros, although this was flat when converted into sterling due to a weak exchange rate. The bulk of the firm’s income comes from eurozone jurisdictions.

Net profit rose by just under 10 per cent, from €84.7m to €93m. The profit due to the firm’s highest-paid member increased by 12.3 per cent, from €911,000 to €1.02m.