In 2012 Bath-headquartered Stone King commemorated 227 years in business, but the firm also had another cause for celebration: a promising hike in turnover, with unaudited total revenue for the 2011-12 financial year-end jumping by 8.49 per cent to £11.5m.
An impressive 65.4 per cent of the year’s turnover figure was derived from its charity and education practices, which it has continued to invest in with a flurry of hires in recent years.
Stone King has made some significant strategic decisions in the past few years, including taking the decision in 2010 to demerge the Sewell Mullings & Logie arm. The firms merged on 1 July 2008, but after a review it was decided they would be better parting ways and they demerged on 1 July 2010.
This saw the firm’s partner count drop from 28 to 23 in 2011. This followed cost-cutting measures in 2009 as Stone King’s revenue fell 10 per cent short of budget even though bills delivered to the firm’s clients during the year had increased by 24.6 per cent compared with the previous year.
The firm was forced to make 16 fee-earners and support staff redundant, some voluntarily, These cuts mainly affected the property and transactional areas.
Although no partners were let go the redundancies had a marked impact on average profit per equity partner (PEP), which shot up from £119,606 in 2009-10 to £144,172 in 2010-11. The firm was also boosted in 2010 by the hire of a two-partner business property and private client team from Wansbroughs Solicitors, which saw it open an office in Melksham.
Stone King’s highest paid partner took home £174,931 in 2010, according to its LLP accounts – up on £137,742 in 2009. This figure grew to £229,936 in 2011-12, bringing the highest paid partner figure much closer to 2008 levels, when they received £250,015.
Much of the firm’s growth in recent years has been centred on its London office (see box). In 2009 the firm moved to larger premises on St John’s Lane in Clerkenwell to cope with a rising City headcount, which increased to 34 by the 2011-12 financial year-end. Stone King also took extra office space in Cambridge in 2011 to accommodate rising staff numbers and plans to review its office portfolio in Bath, which may result in consolidation or investment in new premises.
Investment in new offices, premises and hires has inevitably had an impact on the firm’s financials, with total staff costs rising from £3.3m to £4.67m and total operating lease costs increasing from £338,028 to £574,022.
The firm is not overly reliant on bank loans, however, with the total amount borrowed in the form of an overdraft or short-term loans standing at just over £1.8m last year.
2012 was also a good year in terms of cash, in-hand and at the bank. This figure jumped from £289,650 in 2010-11 to £1.08m in 2011-12. According to the firm, this was due to a one-off change in working capital management, with the effect of only reducing net bank borrowings by £50,000.
London as a launch-pad
Stone King first appeared in London when it took space with a firm of accoutants in 1986 to expand its charity offering. Although still less than half the size of the firm’s Bath headquarters, 10 of the firm’s 24 partners spend all or part of their time in the office on St. John’s Lane in Clerkenwell, with the headcount now at 43 and expected to reach 48 by year end. Managing partner Steven Greenwood has ambitious plans to expand the office into a launch-pad for future business and this will form a key part of the firm’s upcoming strategy review review.