Cobbetts improves profits and pays down debt

LAW FIRM Cobbetts managed to increase net profits by 14% to £10.4m in the year to April 30, despite a 7% fall in fee income to £42.8m.

The Manchester-based firm, which also has offices in Leeds, Birmingham and London, said that it had concentrated on paying down its bank borrowings. By the year end, the firm’s net debt had dropped by almost a quarter through the year to £8.8m.

Managing partner, Michael Shaw, said that as the firm had not been burdened with the level of restructuring costs it had faced in the prior year, it had returned to a “sound financial footing”.

“While certain transactional areas continued to experience sluggish deal flow, in others we achieved substantial growth.

“In banking and finance litigation, for example, we were appointed to three new panels, increased headcount by 14 to 73 and generated record fee income acting for mortgage providers, clearing banks and other lenders.

He added that its public services team had been busy developing new ownership models and was looking to set up some 200 co-operative schools by the end of the year, while investments in overseas markets had seen it launch Cobbetts International following its first cross-border partnership with Egyptian firm El Said Darwish & Partners. It also picked up more work from clients in Russia and the Middle East.

“The last two years have been challenging for the entire legal community, and we are by no means back to the level we wish to be, but by concentrating effort and resources in areas of market differentiation and potential growth, we have weathered the storm and are now emerging stronger and hungrier than before.

“With a strengthened balance sheet and a robust WIP (work in progress), we are now looking forward to a year of controlled growth by capitalising on our existing strengths and continuing to innovate in areas where we see significant opportunity.”