Trowers & Hamlins has seen £10m wiped from its operating profit over the last twelve months and the firm took out a £3m overdraft facility, its LLP accounts for 2012/13 reveal.
Operating profit fell from £28.4m in 2011/12 to £18.8m in 2012/13, while revenue dropped 3.6 per cent, the filings at Companies House show.
Group revenue dipped from £81.2m to £78.2m, but profit available for distribution among the firm’s 51.6 equity partners plummeted by £10m, from £26.2m last year to £16.1m for 2012/13.
The firm also took on a £3m overdraft after a tough year and a London office move. It posted cash reserves of £9.4m in 2011/12 which fell to £1.8m and the firm’s overdraft had increased from £202,000 to £3.8m.
The highest earner at the firm took home less than last year at £411,002 compared to £496,838 last year.
In July, The Lawyer reported that profit per equity partner at the firm had dropped 14 per cent, from £358,000 to £307,000 and those at the top of equity had seen their salaries fall by 17 per cent from £496,000 to £412,000 (9 July 2013).
The accounts reveal that last year the £28.6m the firm paid out in salaries and wages over the year to its 256 fee earners and 271 support staff.
Trowers has experienced a tough year, reporting a net profit from of 14 per cent from £16.8m to £14.5m in the UK in June. It said its turnover dip reflected ”difficult prevailing economic and political conditions in the UK and overseas”.
The firm has experienced big changes over the last year, appointing Jennie Gubbins as senior partner, she took over on 1 April 2013. The firm explained the dive in profitability by a difficult situation in the Middle East and its move to a new London headquarters at Bunhill Row. It put the increase in debt down to the cost of renovating the office and investing in IT.
A statement said: “The cost of the move and budgeted cost of operating two offices concurrently explains why operating profit margins decreased from 36 per cent to 24 per cent.”
At the end of April 2012 the firm had spent £925,000 on fixtures, fittings, furniture and other equipment which had risen to almost £4m by the end of the following year.