Irwin Mitchell halved its bank borrowings last year to move into a net cash position by 30 April 2015, the firm’s accounts have shown.
Bank loans and overdrafts in 2014/15 totalled £6.6m, down from £14.8m the previous year. Irwin Mitchell ended 2014/15 with £801,000 in the bank, a £1.5m movement in funds compared to 2013/14 when the firm had net debt of £713,000. During the previous year the firm reduced its net debt position by 95 per cent.
The firm uses a £45m revolving credit facility and a £15m overdraft to meet its day-to-day working capital requirements. These lending facilities are due to be renewed in March 2018.
Although Irwin Mitchell has reduced its bank borrowings the amount it owes to trade and other creditors has risen steadily since 2012/13. In that year the firm owed £36m to trade creditors and £72.7m to other creditors.
Last year the firm owed £47m to trade creditors, with £92m earmarked for “other creditors” – a rise of 28 per cent in the last two years. Of the sum owed to other creditors £3.25m represents a deferred cash consideration due for the acquisitions of MPH Solicitors and private wealth boutique Berkeley Law in 2013 and 2014 respectively.
It is understood that the increase in amounts due to creditors is largely due to an increase in long-term complex litigation and the firm has also seen a significant increase in trade and other debtors as a result.
In 2014/15 Irwin Mitchell’s turnover increased by a modest 4 per cent, from £202.7m to £210.6m. Net profit increased by 14.7 per cent, from £12.5m to £14.4m.
Irwin Mitchell’s highest paid director received £849,000 last year. Despite the rise in profits this meant that the top of equity was cut by nearly a third from 2014 when the highest pay was £1.2m.
Irwin Mitchell’s accounts cover its LLP as well as its other alternative business structures. These include debt collection company Ascent Performance Group and Berkeley Law.