Kennedys’ net debt doubled in 2011/12 as result of tax loan

Kennedys’ net debt at 30 April 2012 was almost double what it was at the same date in 2011, as the firm took out a tax loan for the first time to ease the pain of paying a lump sum in January.

Nick Thomas
Nick Thomas

Net debt at Kennedys at 30 April 2012 was £18.4m, according to the firm’s LLP accounts, up from £9.5m at the same point in 2011. Similarly, bank loans and overdrafts at the firm increased from £5.8m to £15.7m between 2010/11 and 2011/12.

Kennedys senior partner Nick Thomas said that the increase in debt was due to continuing IT expenditure and the firm’s decision to take out a tax loan to pay its January tax bill. Thomas added that tax loans were increasingly common practice among partnerships and protect firms from having to fund a lump sum payment, which would be somewhere around £6m for Kennedys.

At the same time, Thomas confirmed to The Lawyer that Kennedys was still in talks about a potential tie-up with PI and insurance focused Scottish firm Simpson & Marwick, news of which first broke in November 2012 (21 November 2012).

Kennedys’ highest-paid partner meanwhile received £518,520 in 2011/12, according to the LLP accounts. That figure is down from £541,739 in 2010/11.

Overall, Kennedys was in growth mode in 2011/12. Turnover broke through the £100m barrier for the first time, rising from £96.8m to £109m as average staff numbers rose from 709 to 835. Likewise, the number of equity partners at the firm, where average profit per equity partner is £390,000, was 53, up from 49 in 2010/11. The average number of non-equity partners at the firm in 2011/12 also grew, from 95 to 105.

In the firm’s LLP accounts, management stated: “New offices have been opened in Ireland and Portugal during the year and the members plan to continue to expand the group in the forthcoming period.”