LLP results: arrears window

Mixed bag as many firms get back in the black, while one’s debt rises by 10,493%

It’s LLP accounts filing season – most firms have until the end of this month to get their accounts audited and filed at Companies House. But even with a relatively small sample of accounts, some interesting trends are emerging.

One is around debt levels. A number of firms have managed to decrease their debt significantly in the past 12 months, but others have seen debt soar. The most significant rise came at Lewis Silkin, which increased its bank loans and overdraft from £145,000 in 2011/12 to £1.3m last year. Net debt, taking account of cashflow, rose by a whopping 10,493 per cent, from just £11,809 in 2011/12 to £1.25m last year. However, as a percentage of turnover, £1.25m in net debt remains low. 

Lewis Silkin produced turnover of £41.3m last year, with net profit of £14.3m, meaning its net debt is only 3 per cent of revenue and 9 per cent of profit – much lower than many firms.

Berwin Leighton Paisner (BLP) also had a significant rise in debt levels. Net debt went up £14.78m to £34.59m, its LLP accounts revealed, an increase of 134 per cent. 

A spokesperson tells The Lawyer: “We restructured our financing arrangements in early 2013 to generate cost efficiencies and to provide greater capacity for future investment. We expect borrowings to steadily reduce during 2014.”

Firms that cut their debt levels included Charles Russell. The firm’s net debt dropped by 94 per cent, from £5.2m to just £310,000. Charles Russell had £6.7m in the bank at year-end, almost cancelling out its £7m bank loans.

Wedlake Bell, which merged with Cumberland Ellis in April 2012, paid off a considerable amount of debt during the year and saw net borrowings fall by 43 per cent, from £3.7m to £2.1m – although the firm’s overdraft rose from £491,000 in 2011/12 to £719,500 last year.

Several firms with positive cash balances, as opposed to net debt, also paid off borrowings during the year. Nabarro began 2012/13 with £1.5m in bank borrowings, which it paid off, ending the year with £13.2m cash in the bank – almost double the £6.7m cash balance it ended 2012 with.