Listed firm Ince has laid off 50 employees this year and will continue to suspend dividend payments in an attempt to manage cash flow, according to a trading update.
In an AGM statement and trading update published today, the Ince Group plc announced that 50 fee earners and support staff have been made redundant in areas where it is not expected that business will recover in the medium term.
The firm is also considering scaling back its premises in response to changing working practices, stating its ‘current office space may be too large or may no longer be suitable’.
‘In this context, investors should note that the group’s material long term property commitments all have an opportunity for a tenant’s break within the next three years. This will allow the group the flexibility to meet such changed working practices and, in the medium, the potential to achieve significant further operational cost savings,’ it said.
Dividend payments to shareholders will also remain suspended 'in light of the expected cash flow profile’.
According to the firm’s statement, trading from 1 April 2020 to 31 August 2020 produced revenues ahead of the same period last year, and all the overseas offices have delivered revenues ahead of 2019 with improving gross margins.
However, the UK ‘has not performed as well as the impact of Covid-19 has limited activity in, particularly, the aviation, real estate and corporate sectors, in part offset by more stable levels of activity in both shipping and dispute resolution’.
The group’s cash holdings on 31 August 2020 were £4.9m – down from £5.3m on 31 March 2020 - and net debt was £8m, down from £9m at the end of March.
‘It remains the board’s expectation that the cash position of the group will start to improve from Q4 onwards,’ the statement said. ‘The group’s recently deployed cash management reporting tools (through its internally developed practice management systems) have been highly effective in enabling real time active management of its cash position over the year to date.’
It added that the firm is ‘poised to weather the challenges of the current market conditions and uncertainties and to perform strongly once more normal circumstances return’.
Shares in Ince Group plc were down 11.5% to 21.6p today, compared with 115p at the start of the year.
*The Law Society is keeping the coronavirus situation under review and monitoring the advice it receives from the Foreign & Commonwealth Office and Public Health England.