Ince will consolidate its UK legal practice and may also restructure its business in Europe and Asia, the listed law firm said today as it attempts to recover from recent ‘financial difficulties’.

The firm told the London Stock Exchange that it will ‘refocus on sectors/divisions to facilitate increased utilisation and cross selling’ in the UK, while it also plans to ‘restructure our European business to align more specifically to our core legal business’.

‘This may include an accounting deconsolidation of part of our German business following a review of its local regulatory structure, although that business will continue to work closely with the group as part of our future strategy and in order to maintain a strong presence in that market,’ it said.

Ince also said that it has experienced ‘difficult’ trading conditions in Singapore and that its business in the country ‘may also be deconsolidated in the group’s accounts as a result of having clarified its local regulatory position’.

In a trading update, Ince said it ‘continued to experience difficult trading conditions’ in the UK in the period to August 2022, but that ‘revenues have continued to recover to near 2021 levels’.

The firm added that it is ‘on track to have increased trading activity over the full year to 31 March 2023’, though its results for the last six months ‘are not expected to improve on the same period in the prior year on a like-for-like basis’ – excluding the recently-sold tax consultancy firm CW Energy.

Ince’s new UK management team has made ‘significant improvements to our outstanding fee collections’ and is making ‘positive inroads into our £11.8m outstanding debtor book in the UK’ under its new head of finance and administration Jillian Watt, it said.

However, the firm revealed that it ‘currently has cash of approximately £3.5m and net debt of approximately £15m’.

‘The group’s third-party debt funders remain supportive of the group and the new management’s strategy for cost reductions, rationalisations and a more sector and specialism focussed strategic approach to future growth,’ it added.

Chief executive Donald Brown said: ‘In my short time as CEO, I am delighted with the progress we have made as a team. The group continues to undergo a period of renewal supported by an excellent team of partners and clients.

‘Together we are committed to providing a strong platform for future success, most of the components for which are already in place. I look forward to providing a more fulsome update at the time of the publication of our annual report.’

Ince has experienced a rough spell in recent months and said earlier this week that it paid former chief executive Adrian Biles and his father John Biles, ex-head of finance, £15,000 each to settle their claims for loss of office.

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.

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 to £97m – which the firm said today is still its expectation ‘subject to audit and the accounting treatment which may arise from potential accounting deconsolidations of Singapore and Germany’.

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.

Shares in Ince Group plc slipped 6.7% to 4.2p today. 

 

This article is now closed for comment.