Simmons announces results with a 20% PEP fall for 2008-09

Simmons & Simmons saw profits per equity partner (PEP) drop by nearly 20% last year, taking the firm back down to 2006-07 levels.

The top 10 City firm has announced that PEP for 2008-09 stood at £520,000, compared with £647,000 the previous year.

The drop comes against a marginal increase in revenues, with turnover for 2008-09 standing at £291m, compared with £289.2m in 2007-08.

The firm attributed the drop in profits to factors including reduced transactional levels as well as just over £5m in one-off costs relating to its redundancy programme.

The firm laid off 91 staff in May – an increase on the initial 69 jobs it said were at risk in February. The consultation resulted in 18 associates, 41 secretaries and 14 business support staff losing their jobs, with a further 18 staff going as a result of a separate review of the business development and marketing function.

In addition to pay covering the notice period, it is understood that the voluntary redundancy package offered two and a half weeks' pay for each year of service. The minimum pay for compulsory redundancy was six times two weeks' pay, while the minimum for those accepting voluntary redundancy stood receive eight times two and a half weeks' pay.

All of the costs of this restructuring were included in the 2008-09 revenues.

Managing partner Mark Dawkins said the results reflected a strong first half of the year, with the latter half more difficult. The relative weakness of the pound against other currencies inflated the firm's sterling income figure, but a long-standing hedging policy to protect PEP from currency fluctuations meant profits were not inflated. Around half of the firm's revenues are generated outside the UK.

Dawkins said: "I'm not disappointed by the results, it's in-line with other firms and, given the events which unfolded last September, I'm relieved it wasn't worse. Activity levels were down in some areas and we also had the restructuring costs from which we haven't yet incurred any benefit."

Commenting on the coming year he added: "It's all still pretty uncertain. We're starting to see some positive signs from corporates but I don't think it's likely to be a great year for firms."

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