Gordon Dadds has posted its first set of results since its London Stock Market flotation this August, with its half-year financials to 30 September showing a 14.5 per cent rise in revenue to £12.89m.
Profit forecasts for Gordon Dadds Group have been revised upwards following strong trading and the £4m acquisition of three-partner tax consultant CW Energy last month. The firm also acquired South London law firm Alen-Buckley in June.
Chief executive Adrian Biles said the acquisitions had “bedded down well” and the group had traded to expectations, despite the current period of uncertainty created primarily by Brexit as well as the “distractions” caused by the IPO.
Biles said the pipeline for the next six months looked strong, adding that Gordon Dadds was currently considering further acquisitions of firms ranging from £1m to £13m in turnover. While Gordon Dadds group does not solely focus on law firms, a £13m solicitors firm would feature in the lower half of the UK 200.
Biles said the last six months had highlighted great interest in both the Gordon Dadds business and model, something underlined by the Stock Market flotation this month of dispersed firm Keystone and that of Gateley in 2015. Biles added that it was possible his firm may look to launch a Keystone-style service in the future.
“All three firms have different models attacking same problem, the capitalisation of the business,” said Biles. “The Keystone model is actually not that difficult to replicate and we can see how it could be attractive to both individual lawyers, possibly those at the more mature end of their careers, and their clients. We’re looking at it in considerable detail.”
Gordon Dadds’ is looking to double its revenues to £50m over the next three years and achieve a 15 per cent net profit margin. Its growth in recent years has been powered by the acquisition of failing firms, notably Davenport Lyons and Jeffrey Green Russell.
The firm has also branched out into other advisory services. In June 2016 Gordon Dadds launched GD Financial Markets, a management consultancy providing a range of services such as advisory, business consulting, solution integration and managed services to capital markets clients.
In 2015/16 Gordon Dadds posted a revenue of £20.2m and an average revenue per lawyer of £238,000. Last year turnover stood at £23.16m, with a net profit of £2.2m and average profit per equity partner of £748,000. Top of equity was £1.7m.
Speaking to The Lawyer for last year’s UK 200, Biles underlined his belief that the legal market needed to change.
“The future’s already here,” warned Biles. “Increasingly I can only see consolidation as a sensible answer. The more I see, the more consolidation makes sense. The inability to deliver a full service to a very large client is an increasing pressure on smaller firms. They need to broaden and deepen the offering. And it can only work at the right scale, you can’t do it sub scale. I would say scale means at least £50m, maybe even £100m.”