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‘A challenging year’: DAC Beachcroft profit falls as firm hit by rising staff costs and IT failure

DAC Beachcroft’s latest LLP fillings at Companies House have revealed the firm’s profits available for division among members fell by 18.3% from £31.2m in the 2012/13 financial year to £25.5m in the year to 30 April 2014 as staff costs rose and the firm booked the cost of an IT failure.

Profits fell even before the IT failure was included with operating profit dropping from £32.6m in financial year 2013 to £31.1m in 2014, the firm was then hit by the unviable IT project which it booked as a £2.9m exceptional item.

However, the firm did see an increase in fee income which rose from £186.8m to £197.2m, which the firm put down mostly to organic growth though it did note its partnership with De La Torre & Monroy in Colombia which it formalised on 1 December 2013.

The extra income was offset by rising staff costs which rose by 10% from £99m to £109m as headcount increased by a similar percentage with the number of fee earner working at DAC Beachcroft increasing from 1,328 to 1,473 while support staff increased from 803 to 723.

On the other hand, the average number of members dropped from 113 to 109 with the highest profit share also fell from £450,340 to £438,506. The fillings said the members considered the results: ‘a solid performance in a challenging year.’

The fillings also revealed that the firm had extended its banking facilities by £15m to help it focus on ‘its strategic growth plans’. This saw the amount of bank loans the firm had outstanding rise from £9.2m in 2012/13 to £24.1m in 2013/14.