Camerons LLPs reveal £4.5m bank loan paid to de-equitised partners
CMS Cameron McKenna took out a £4.5m bank loan last year to finance a one-off profit payment to the 16 partners that it moved from the equity into the fixed-share ranks in May 2010.
The information, contained within Camerons' 2009-10 limited liability partnership (LLP) accounts, further highlights the hit on profitability the firm suffered during the financial crisis.
Notably, the firm's profits available for the discretionary division among members fell by 33% between the two financial years, from £57.5m to £38.4m. Meanwhile, net cash inflow from operating activities decreased from £78m to £59m, while cash at the bank and in hand was down from £16m to £9m and net funds at the firm fell from £16m to £5m.
Camerons head of financial control Julian Eastlake said that the decreasing profitability and reduced cash situation came as a direct result of the near-£30m drop in turnover the firm experienced in 2009-10, but that the impact on cash and profits was "partly mitigated by managing costs".
The total group turnover decreased from £237m to £208m during the financial year. However, taking into account turnover from the firm's Moscow joint venture - which separated from the main group in January 2009 - the final audited turnover stands at £215.7m (down from £240m the previous year).
The average number of members in the LLP decreased from 122 to 116 over the financial year, during which eight partners retired from the firm. The highest-paid member earned £567,000 compared to £1,240,000 the previous year - although that figure included a £607,000 retirement provision.
Meanwhile, the total number of fee earners and support staff dropped from 1,563 to 1,380 across the group as a whole. Camerons said the reduction was due to splitting from the Moscow office plus the UK redundancy round that concluded in June 2009, resulting in 73 job cuts. It said a further decline of 30 staff members was through "natural wastage".
The firm said it was too early to tell how much the current partner review - expected to result in fewer than 20 partners departing or being de-equitised - will cost the firm as it is still ongoing.
Camerons' LLP covers the firm's UK offices and Budapest, while the "group" also includes its entire Central and Eastern European operations, excluding the now-separate Moscow joint venture.
By Sofia Lind