Legal Business Blogs

Ashurst set to reach £1m PEP target after 31% surge as revenue tops £641m

Paul Jenkins, Ashurst’s indomitable managing partner, is aiming to reach profit per equity partner (PEP) of £1m in the next financial year as the City stalwart unveils its best financial results to date.

On the back of three consecutive years of growth, the firm added £77m to its top line to hit £641m for the year to 30 April 2019, a significant 14% increase on the £564m turnover of last year.

PEP has also soared 31% to £972,000 from last year’s £743,000, putting Ashurst within sight of its stated intention of smashing the £1m PEP barrier in the next financial year.

The results are a remarkable reversal of fortune for a firm which struggled financially after its 2013 merger with Australia’s Blake Dawson. Jenkins’ (pictured) tenure as global managing partner since 2016 has coincided with consistent growth, with a three-year view showing a strong 27% uptick in revenue and a market-leading 61% hike in PEP from £603,000 in what was a disastrous 2015/16 financial year.

Jenkins, who has been widely credited for driving a high performance culture at the firm, attributed much of Ashurst’s rebound to sticking with the strategy of investing in the five key sectors of banks and funds, energy and resources, real estate, infrastructure and digital economy.

He told Legal Business that each of the firm’s regions outperformed in 2018/19, with double-digit revenue growth in the corporate, finance, funds and restructuring and dispute resolution practices and above 20% revenue growth in projects and real estate. Revenue in Hong Kong and mainland China grew above 20%, Continental Europe performed strongly, and turnover in the Middle East grew by 40%, driven by a focus on infrastructure, energy and resources.

‘The over-riding message is that I want to not just sustain but improve on these results for the next financial year,’ he told Legal Business. ‘We are not going to stand still. We are all aware of the growth potential of the platform and are pushing hard to get even better results than these next year. We want to reach at least £1m in PEP and are looking to achieve that in the next financial year.’

Ashurst chief financial officer Mark Herbert commented: ‘There has been a real focus on financial discipline at the firm over the last three years. People have been more focused on getting the basics right, including working capital management. It is a really important contributor to our revenue growth and partners are onside and working very hard.’

Jenkins is sanguine about the geopolitical uncertainty affecting the markets and noted that APAC growth should help to hedge against any Brexit-related slowdown in the UK, adding that the firm has also grown US revenue by more than 30% in the last financial year.

Jenkins is planning further strategic investment: ‘Strategy-wise, what I say to partners is that we are looking to grow Continental Europe and Asia at a faster rate than the rest of the firm. We already have a strong presence but would like to be stronger.’

Other business highlights have included low-cost centres in Glasgow and Brisbane which are 20% ahead of budget this financial year, as well as Ashurst Digital Ventures, the in-house development and investment arm of Ashurst Advance, the global innovation team that will have its own P&L from this financial year.

Significant mandates for the year have included advising Goldman Sachs on the launch of its digital-first retail banking platform, Marcus; ANZ on the Royal Commission investigation into misconduct in the banking, superannuation and financial services industry; Facebook on the establishment of joint ventures with other technology and telecoms giants to build, own and operate several trans-Asia telecoms backbone network; and Port Authority of New York and New Jersey on the US$2.7bn Newark Liberty International Airport Terminal One Redevelopment project.

To read more on Ashurst’s unlikely rebound, see Inflection point (£)