Small wonder, then, that year-end results announced by Travers earlier this month have shown growth suffer at the hands of prolonged credit turmoil and tumbling business confidence. Although still a highly profitable outfit — profits per equity partner comfortably outstrips many rivals with a similar income — the firm has nonetheless reported a 7.6% drop in profits to £755,000, down from £817,000 last year. Turnover, meanwhile, has edged up 3% to sit at £81m for the year.
With a June year-end, the firm’s recent results take account of a further two months of credit crunch conditions in comparison to the majority of firms signing off their year in April. According to managing partner Chris Carroll, had Travers reported results on the standard April year-end, it would have shown double-digit growth.
“Last year was actually strikingly similar to the year before,” he says. “The problem is overheads have gone up, working on the same profit base.” But despite a recent slowing of growth, on many indicators Travers is performing well, especially as its UK focus means that it has been unable to offset a slowing core market with business from international offices.
The firm’s leading private equity practice, now under the aegis of Phil Sanderson, has continued to make significant steps forward, even when the market is obviously quiet.
Client wins over the year include US giant Carlyle and UK-based Darwin Private Equity. And the practice continues to score a run of work for regular clients such as 3i, Exponent, Bridgepoint and Phoenix, including advising the latter on three closings in one day earlier this month.
Activity also extends to the wider corporate practice, which saw turnover increase in the last 12 months. The firm recently acted for the first time for Ashstead Group as well as scoring a new client in the attractive shape of Goldman Sachs.
One rival says: “There is a confidence about the place, they have a good momentum with the right people in the right places.”
But no denying there is some thumb-twiddling going on in its AIM-heavy public corporate practice. A perennial weak point according to some rivals, Travers has also made some advances on the international front. It recently secured a role for Spanish food company Grupo SOS on its E630m (£497m) acquisition of the Bertolli olive oil and vinegar business from Unilever through referral links with Spanish independent Gomez-Acebo & Pombo. Of late, Travers has also been paying increasing attention to the Asian and emerging markets.
“We obviously don’t have much of an emerging markets presence and in relation to Asia we are certainly working harder, both at the client and law firm level,” Carroll says.
And while the firm is unlikely to announce any major strategic overhaul, it is pushing to refocus at least some of its efforts towards acting for more corporates, giving its practice a broader base.
Aside from some tinkering, Travers is largely — and probably rightly — aiming to stick to the model that has served it well over the economic cycle, even if that means a short-term hit. Carroll predicts the pain will be spread more widely: “I don’t see how everybody can continue to be as busy over the coming months. There will be fallout. Just you wait.”
