Firm reveals spending £900k on aborted acquisition

Insurance firm Keoghs spent almost £900,000 investigating potential acquisition opportunities which did not materialise, accounts have revealed.

The north-west firm pulled out of talks in November 2015 to buy parts of the collapsed business Parabis. No reason for backing out of the deal was given, and the alternative business structure was eventually sold to various parties as a pre-pack administration.

Keoghs’ annual accounts this week stated the firm incurred fees of £893,000 looking into the potential investment. These were filed in the accounts as exceptional items against profits before tax of £11.3m, for the year ending 31 May 2016. This was an increase of 9.6% on the previous year. Turnover at the firm rose 7.2% during the year, from £54.4m to £58.3m.

Keoghs had spent £286,000 on redundancy costs in 2014/15, but last year saw headcount rise as the number of fee-earners increased by almost 100.

In a statement, Keoghs chief financial officer Alex Hodgson said 2015/16 had been a strong year. ‘We have successfully increased our share of a challenging market and our innovative and technology-based solutions have helped our clients achieve their goals,’ he said. ‘The cash we have generated has been utilised to continue our investment in technology and to repay bank debt.’

Meanwhile, accounts at other mid-tier firms suggest they have responded to the challenges of maintaining their top-50 position through cuts to their staff numbers.

National firm Bond Dickinson cut the number of fee-earners in 2016 by 11% to 534. The yearly wage bill was reduced by almost £1m as a result.

The firm saw both turnover and pre-tax profits fall slightly last year: turnover was down 2% to £103m, while profits dipped fractionally to £29.6m.

International firm Hill Dickinson increased pre-tax profits by 2% to £24.5m, despite a slight fall in turnover to £103.4m.

The firm attributed the income fall to the continued exit from ‘non-core activities and tougher trading conditions’ in a small number of specific service lines.

The firm was another to reduce headcount in 2016, cutting overall staff numbers by 10% to 1,100. The biggest cuts were to secretarial and business support sectors, which reduced by 21%.

International firm Fieldfisher enjoyed a positive 2015/16, posting a 19% increase in profits to £51.37m, along with a 7% increase in turnover to £123m.

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Firm reveals spending £900k on aborted acquisition