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Field Fisher Waterhouse’s (FFW) net debt increased by more than 350 per cent to £3.3m in the 2011/12 financial year, the firm’s latest LLP accounts show.
The figure, stated in accounts filed this week at Companies House, rose from £727,000 in 2010/11. That meant the firm was £4.2m overdrawn at the last year-end, with the City outfit having access to a £12m overdraft facility, expected to be renewed in April this year.
Interest on banks loans and the overdraft increased by 71.5 per cent from £95,000 to £163,000.
The top-earning partner’s profit share dropped by 20 per cent from £680,464 to £544,232, roughly in line with the 20 per cent drop in average profit per equity partner.
Drawings and distributions at £35.3m were higher than the firm’s pre-tax profit of £33.1m, a 4 per cent drop on £34.3m in 2010/11. The firm said this was a result of paying some historic balances to partners.
The accounts were put together on a going concern basis. The report, however, highlights economic conditions that could have an impact on demand for the firm’s services, as well as liquidity pressure on clients and suppliers. It also states that the firm has “considerable financial resources” and “considerable discretion over the timing of any cash distributions paid to its members”.
The firm said in a statement: “We’re seeing increasing pressure from clients with regards to payment terms, but remain well within our overdraft facility.”
Meanwhile, staff costs dropped by 5 per cent from £37.4m to £35.7m.
The firm said: “We continue to manage our headcount and ensure that it is appropriate for the work available and the future business needs of the firm.”
Meanwhile, turnover for 2011/12 is stated as £99.1m, slightly up on the £97.5m the firm announced several months ago (5 July 2012). The increase is due to a redefinition of the firm’s valuation of year-end work in progress.
The accounts also reveal that the number of fixed-share partners at the firm increased from 73 to 93 over the course of the 2011/12 year, with the increase coming from the transfer of salaried partners to fixed-share when the firm scrapped its salaried ranks last year (16 October 2012). The increase was also because of the acquisition of the firm’s German operations by its UK LLP.
As part of the deal, no consideration was paid by the UK LLP when it took control of Field Fisher Waterhouse Deutschland LLP on 1 May 2011. All the German partners joined the UK LLP.
The move meant the firm was merged with the German arm from an accounting and systems perspective.