Cobbetts' LLP filing reveals £9m profit for 2008-09
Cobbetts posted a net profit of £9.38m in the 2008-09 financial year alongside a 20.6 per cent drop in revenues.
The firm’ LLP accounts have revealed that the firm’s turnover fell from £59.79m to £47.5m while profit fell 44.7 per cent from £16.95m in 2007-08.
During last year’s reporting season Cobbetts managing partner Michael Shaw (pictured) refused to divulge the firm’s average profit per equity partner figure (PEP) and refused to answer questions about whether the firm would be registering any profit at all.
The LLP accounts reveal that Cobbetts’ net debt also grew during the 2008-09 financial year, by 60.3 per cent from £7.17m to £11.49m. The firm’s borrowings included a facility from RBS secured by a debenture for its wholly-owned debt recovery subsidiary Incasso.
As one City partner put it: “These are not great results, but they aren’t a basket case either. I expected Cobbetts to be sitting on a disaster and they aren’t.
“The banks have refinanced it and only the subsidiary LLP has had to give security to RBS.
“Working capital has been under stress but it has for many firms.”
Readers' comments (7)
Leeds Lawyer Rides Again | 10-Feb-2010 7:47 pm
That's £100,000 per Partner! That's not good! This is not sustainable beyond the short term. Change of management me thinks....
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Anonymous | 10-Feb-2010 11:21 pm
As a seasoned CFO in the legal sector it never ceases to amaze me how deluded equity partners are when it comes to the financial well being of their firms.
Cobbetts net debt has grown by 60.3 % yet a "City partner regards it as not a basket case" !! What planet is he/she on ?
Part of the problem is law firm Finance Directors' inability or unwillingness to rock the boat, slap these EPs about the face (not literally) and say "Hey guys, wake up and smell the coffee - we have some serious sh1t to deal with here".
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Northern Sort | 11-Feb-2010 8:04 pm
if you think the debt here is bad just wait until you see the figures for Halliwells. Circa £22m between 48 equity partners but soon to be 32. Just do the math.
Nice offices though.
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Ron Wade | 11-Feb-2010 10:23 pm
They need a merger as do Halliwells. Put them together and we have Hallibetts. One RBS debenture and a single smelly fish in the same basket. Result!
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Aving Alaugh | 12-Feb-2010 1:12 pm
The analogy with Halliwells is apposite...both firms have overreached themselves in a doomed quest to challenge the strong national firms and consequently entered markets they shouldn't have and are now paying the price. Time the management in both firms was refreshed.
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Anonymous | 15-Feb-2010 2:36 pm
Whilst I agree that these figures are of concern it amazes me how some people can post flipant comments and jokes about law firms who may be in difficulty. I am a partner at a competitor firm and whilst I like to see my firm be succesful, I have much sympathy for those individuals at firms in difficulty who are trying to do their best to turn matters around. Their fee earners are people with families and other commitments and the joke like comments which are posted on this site will only add to their frustrations and concerns at a time when their worries will be heightened by the editorial. I sincerely hope that not only both firms come through this economic crisis but we all emerge much stronger through the experience.
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Serious Sid | 15-Feb-2010 6:38 pm
Let us pray for our brothers at Cobbetts and Halliwells. Let us pray that they pull through and emerge from the darkness and into the light.
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