Net debt more than doubles at RPC

Net debt at Reynolds Porter Chamberlain (RPC) has increased by £2.8m according to the firm’s latest LLP filings, from £2.3m to £5.1m.

Last year RPC increased its bank loans by £1.8m, repayable in monthly instalments until 2017 at 2.5 per cent plus Libor, to £4.8m in 2012/13.

The firm also added £420,428 to a short-term bank loan, which now totals £833,333 and is due for repayment in 2013.

The loans, which total £5.6m, are secured on the members’ interests and £2.2m is due for repayment in one year or less, or on demand. The debt is offset by £530,000 cash in hand at the bank – a figure which dropped from £1.1m cash at the start of the year.

RPC managing partner Jonathan Watmough put the debt increase down to the firm’s investment in new offices in Singapore, Bristol and Hong Kong.

“That’s 140 new people from a standing start, plus all of the infrastructure to go with them, half of them overseas,” he said.

Watmough went on to explain that the debt profile of the firm is relatively small when compared to its turnover. RPC’s debt is 6.2 per cent of its overall revenues.  

“We’ve invested largely out of our cash in other words, and not by virtue of the short-term availability of cheap bank debt, and we’re paying it down fast,” Watmough added.

Turnover at the firm increased by 21.3 per cent from £67.4m to £81.7m in 2012/13, while the total amount available for distribution among partners rose by 8.2 per cent from £24.1m to £26m.

The average number of partners at the firm, which includes members and those of equivalent status outside of the UK, rose by 12 per cent from 67 to 75.

The estimated remuneration for the highest paid partner was £928,018, up 17.5 per cent on £789,282 in the previous year.

The firm added four non-member partners of equivalent status last year as a result of the firm’s expansion into Hong Kong where, for regulatory reasons, the partners can not be members of the UK LLP.

The four Asia partners are entitled to £1.6m of profits between them for the 2012/13 financial year.

The firm formally launched in Bristol with 18 lawyers from CMS Cameron McKenna in January 2012 (3 January 2012).

In 2011/12, RPC achieved a turnover of £68.7m, a 12 per cent increase from the previous year. The distributable profit per equity partner was £354,000, up 9 per cent from £324,000 in 2010/11. The highest-paid partner took home £789,282, 30 per cent more than the highest amount paid to a partner in the previous year (6 February 2013).

The LLP filings stated that due to the tough economic conditions and limited transactional activity, the firm took the opportunity for strategic expansion into Asia and in the UK.

Right at the start of the 2012/13 financial year, RPC added to its small Asia presence in Singapore by launching a Hong Kong office. The firm hit Clyde & Co four legacy Barlow Lyde & Gilbert (BLG) partners (4 April 2012).