Listed law firm Ince is selling off tax consultancy firm CW Energy to remove £2.9m from its balance sheet following recent ‘financial difficulties’.

The firm today announced the disposal of CW Energy – which provides specialist taxation services to the energy sector and was acquired for £4m in cash in November 2017 – back to its original vendors.

Ince said that it will not receive a consideration under the deal, but that it will ‘no longer be liable to pay the original vendors £2.9m of deferred consideration and this amount will be removed from the group’s balance sheet on completion of the disposal’.

The firm explored options to expand CW Energy’s revenue base within the group ‘but the board has concluded that it will not be possible to deliver significant revenue increases or synergies and savings in CW Energy LLP’s underlying cost base have not been identified’, it told the stock market.

Chief executive Donald Brown described the deal as ‘the first move in aligning our businesses to ensure that we can develop our core legal services practices together with clear cross-selling opportunities within the wider group’.

Shares in Ince Group plc were down almost 2% to 4.32p by 11:30am following this morning’s announcement. The group was trading at more than 55p a year ago.

Ince has experienced a difficult spell in recent months: former chief executive Adrian Biles was removed as a director ‘with immediate effect’ on Monday due to a possible ‘conflict of interest’, while his father John Biles was also replaced as head of finance and administration.

The firm has also delayed the publication of its annual report for the year ending 31 March 2022 until November, citing the impact of Covid-19 on the preparation of its accounts. A trading update will be published before the end of this month.

It revealed in May that pre-tax profits for the last financial year are likely to be ‘short of market expectations’ with global revenue expected to fall by 3% to £97m after a ‘challenging’ final quarter.

Ince last month announced that it generated a total of £9.5m from a fundraising exercise and open share offer needed to stave off ‘financial difficulties’, having said in July that it was ‘at the limit of its borrowing facilities and was unable to make a short-term repayment’ at the end of May.

The firm saw its shares halve in value after announcing the fundraising exercise and that a cyber attack in March would cost it some £5m.

 

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