Simmons’ financial management pays off as profit soars and debt falls

A focus on costs and lock-up management helped Simmons & Simmons to soaring profits and a reduction in borrowing costs for the last financial year, the firm’s LLP accounts have shown.

In the introduction to the accounts, filed with Companies House this week, the firm said it had continued to “maintain tight controls on costs, with a particular focus on lock-up management”.

At the end of the financial year Simmons’ net debt stood at £22.6m, down from £24.8m the previous year. That including a balance of £40.2m on the firm’s revolving partner capital loan, up from £40m at the end of 2013/14, offset by £17.7m of cash in the bank.

The firm said the revolving capital loan would expire on 31 October 2016, but that it would be renewed for three or possibly five years at that point.

Profits available for partner distribution rose by 22 per cent, from £63.3m in 2013/14 to £77.2m last year. The amount of profit due to the highest-earning partner rose by 20 per cent, from £1m to £1.2m.

Audited revenue rose by 7.5 per cent from £268.6m to £288.9m, very slightly less than announced when the firm provided unaudited figures last year.

Simmons said the increase was due to a recovery of business levels “in some jurisdictions” as well as its launch in Luxembourg at the end of 2014.

The firm’s financial markets team was easily the largest group in revenue terms last year, contributing 40 per cent of turnover or £115.5m. That was a 10.7 per cent increase from £104.3m the previous year.

Revenue from the litigation group rose by 13 per cent, from £82.5m to £93.1m. The corporate and commercial team saw revenue slip by almost £2m to £57.7m.

Although Simmons’ total headcount numbers fell 4.5 per cent from 1,428 in 2013/14 to 1,363 last year, its staff costs increased by almost 5 per cent to £117.9m.