Kennedys renews debenture agreement with Allied Irish Banks following expansive year

Kennedys senior partner Nick Thomas

Kennedys has renewed its debenture agreement with Allied Irish Banks (AIB), the firm’s 2016-17 limited liability partnership (LLP) filings have revealed.

AIB first took out a fixed and floating charge over Kennedys’ LLP in order to secure loans to the firm in October 2012. The firm renewed the agreement on the same terms on 31 December 2017.

The filings also show that operating profit rose 2.4% from £38.2m to £39.1m, although profit for division among members fell 10% from £22.5m to £20.2m. Last summer, the firm posted an 8.7% fall in profit per equity partner from £458,000 to £418,000.

The amount due to creditors within one year rose significantly, up 27% from £42.1m to £53.5m, while bank overdrafts increased more than 50% from £7.4m to £11.2m.

Total remuneration for key management rose to £7.6m, up 6.7% from £7.1m in 2015-16, while the firm’s highest-paid partner took home £672,000, down 7% from last year’s figure of £720,000.

Staff costs grew from £57.2m to £66.1m, an increase of 15.6%, owing in part to a similar increase in total wages and salaries from £48.1m to £55.6m. The average number of employees rose from 1,114 to 1,230, with fee earners up from 701 to 747 and other staff rising from 443 to 483.

The increases come on the back of a period of aggressive expansion by the firm, including the opening of offices in Mexico, Argentina, Paris, Bangkok, Melbourne and Bermuda. It also completed a merger with US boutique insurance firm Carroll McNulty & Kull and, in the UK, united with Manchester commercial litigation specialists Berg.

This expansion was reflected in the geographic breakdown of revenues in the LLP accounts, which show that while UK and Europe turnover increased by 2% and 9% respectively, the firm has seen more significant growth elsewhere, with revenues for the rest of the world rising 34% from £31.3m to £42m.