DAC Beachcroft and Kennedys announce eye-popping debts
08 February 2013
DAC Beachcroft's debts have more than tripled in the last year according to its latest figures. Meanwhile Kennedys has doubled its debt and taken out a loan to cover the firm's tax liabilities for the first time.
According to LLP accounts reported by The Lawyer
, DAC Beachcroft's net debt leapt from £10 million in 2010/11 to £34 million in 2011/12, of which nearly £30 million is payable within a year. That adds up to a debt over 150% larger than the £21.9 million profit available for distribution to partners in the 2011/12 period. The firm admitted its cash position has "worsened
" but pointed out that its purchase of Davies Arnold Cooper for £8 million was a one-time-only expense. Money owed by clients soared too, from £38.9 million to £71.2 million. The firm said its solution is to install new IT systems "to enable better debt collection
DAC Beachcroft celebrates balancing the books for another week
Kennedys also dived deeper into the red, despite posting record turnover of £109m. Debt has almost doubled since the same time last year, from £9.5 million to £18.4 million. Most of it is down to a loan, estimated to be £6 million, which was taken out to pay a January tax bill. Tax loans are new territory for Kennedys, although senior partner Nick Thomas maintained that they are increasingly common among law firms.