DAC Beachcroft has issued a £10m cash call to LLP members and simultaneously increased its rolling credit facility to £40m, as it aims to reach target revenue of £200m by the end of the financial year.
The top 30 firm, which merged with Davies Arnold Cooper in 2011, announced today (18 November) that its half-year results for 2013/14 amounted to £90m in total billings for the six-month period to 31 October, an increase of 7% compared to the first half of last year. Senior partner Simon Hodson told Legal Business he believes the results were ‘quite strong.’ This increase is on top of a 15% rise in revenues for the financial year 2012/13 to £188.2m.
The firm has also confirmed a four-year flexible financing facility of up to £40m with Lloyds Bank and HSBC, a facility which Hodson said ‘is available for us to do what we want with.’
The increase in member contributions to capital by £10m brings the firm ‘more in line with businesses of [its] size,’ said managing partner Paul Murray (pictured). He also noted that despite ‘widespread speculation around the difficulties of raising finance in the current economic climate, both banks were pleased to provide additional facilities, reflecting their belief in our business model and growth strategy.’
According to the firm’s LLP accounts for 2011/12, the firm’s overdraft facility with both Lloyds and HSBC stood at £29.6m, a substantial increase compared to 2011 when the figure equalled over £5.1m.
Commenting on the new funding arrangements, Murray added: ‘We’ve grown from an £89m business in 2005 to what we expect to be a £200m business at the end of this financial year. In that time, we have grown from seven UK offices to being a global business with offices in four continents. Running a business of this size requires guaranteed amounts of working capital and the flexibility to deal with peaks and troughs of cash flow.’
‘With sound financial management and a continued focus on billing and cash collection right throughout the year, I’m confident that we will see a year-end result that will justify the considerable faith the banks and the members have shown in our business.’
Other national players to make the cash call this year include Hill Dickinson, which voted though a £2.8m cash call to partners in August to boost the balance sheet, due to what managing partner Peter Jackson said was down to a year of heavy investment.