Euro effect drives Lovells revenues up to £531m

Lovells has posted double-digit turnover growth as the euro's dramatic rise over the financial year helped lift the firm's sterling-denominated revenues.

Preliminary results for the 2008-09 year show that turnover jumped from £479m in 2007-08 to £531m, representing an 11% rise. The increase is largely attributed to the strength of the euro and dollar against the pound, which Lovells estimates boosted turnover by around 10%.

Profits per equity partner (PEP) fell by 11.4% from £661,000 to £585,000. The dip in profitability is likely to be reflected across the City's leading firms, with the majority yet to announce their results.

The results are also the first time that Lovells' well-regarded Continental Europe practice has generated more than its City office, with the European network accounting for 43% of billings compared to London's 42%.

The Asia and Middle East region were cited as strong performers growing to 10% of billings, against 6.5% the previous year, while the US branch represented 5% of income, a small annual increase.

The breakdown of practices shows the firm's broad spread with corporate making up 29% of income, commerce and real estate 28%, finance 20% and dispute resolution 23%.

Managing partner David Harris (pictured) told Legal Week: "What we have seen year-on-year is a 1%-2% increase in Continental Europe revenue relative to London, and this year there has been a greater shift toward Europe. This is down to the continued investment in the region and, of course, the economic impact on London. Until recently Germany and France have been remarkably resilient so it may well balance out when we see the full impact of the economy across Continental Europe this year."

He added: "Given the extraordinary market changes we have seen, we consider our performance to be a pretty respectable result. Our international reach and the breadth of our practice create a balance to the firm, enabling us to perform reasonably well in difficult market conditions."

The results build on the solid half-year performance for Lovells when it revealed a 15% jump in income. The firm lined up on a number of high-profile deals last year including acting for Dexia and DEPFA in relation to the €1.3bn (£1.04bn) securitisation of Delta Spark, and advising Electricite de France on the £11bn financing of its offer for British Energy.

The firm has also been instructed on more than 30 matters in relation to the collapse of Lehman Brothers, in addition to a £500m rights issue for property investment and development company SEGRO.

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