FFW reports £2.4m rise in members’ capital as debt levels increase

Lateral hires and promotions led to a £2.4m increase in members’ capital at Field Fisher Waterhouse (FFW) in the 2012/13 financial year, the firm’s LLP accounts have shown.

Members paid in a total of £4.4m during the year, offset by £1.8m repaid to retiring and leaving partners. The firm said the capital introduced came from lateral hires and “normal increases in capital from partner promotions and progression up the partnership lockstep”.

FFW made up six partners at the start of the 2012/13 financial year (25 April 2012), with hires including Irwin Mitchell’s Caroline Pinfold (14 May 2012) and Wedlake Bell corporate head Tim Bird (21 February 2012).

The increase in capital came in a year when the firm saw turnover drop and profit remain static, while debt levels – which soared by 350 per cent the previous year (6 February 2013) – rose by a further 61 per cent.

The accounts show that audited turnover dropped from £99.1m in 2011/12 to £96.7m last year. Net profit rose marginally, from £33.1m to £33.3m.

Although profit was stable, the amount due to the highest-paid LLP member in 2012/13 was £625,000, up 15 per cent from £544,000 the previous year. FFW added four LLP members between 2011/12 and 2012/13, but the number of equity partners rose from 46 to 56 while the number of fixed-share equity partners dropped, from 93 to 87.

Drawings and distributions dropped to £33.4m last year from £35.3m. FFW said the high amount in 2011/12 was a result of paying historic balances to partners.

The firm’s net debt rose from £3.3m at the start of the financial year to £5.3m at the end. The firm increased its bank borrowings from £4.5m to £7.6m, but cash flow improved and the £2.3m cash in the bank at year-end offset borrowings. A spokesperson for the firm said the cash and borrowings were used to fund working capital.

Staff numbers at FFW fell by around 7 per cent, from 567 in 2011/12 to 532 last year. Staff costs, meanwhile, dropped by 6 per cent, from £35.7m to £33.6m.

The LLP accounts also show that the lease on premises formerly owned by 1998 merger partner Allison & Humphreys (18 November 1997) finally expired in September 2012. A group of former Allison & Humphreys partners had taken out loans with FFW to bear the loss arising from these premises (15 February 2012), and last year were repaid the balance of £272,179. The loss arising from the lease stood at £10,859 for the period from 1 May 2012 to its expiry in September that year.