International firm Trowers & Hamlins has blamed ‘inflationary pressure’ – most notably a soaring wage bill – for subduing profits in the last financial year.
The firm generated a surplus before members’ remuneration and profit shares of £39.2m for the 12 months to 31 March 2024, up from £38m in 2022-23. Income climbed from £135.6m to £142.3m, annual accounts filed at Companies House show.
Much of the revenue rise was consumed by extra staff costs, which rose £5m year on year to £66.6m.
In its report to members, Trowers’ board said a ‘continuing challenging environment’ had ‘suppressed utilisation primarily in real estate and corporate service lines’. Last October the firm announced a redundancy programme focused mainly on the real estate department. Growth was ‘strong’, by contrast, in litigation, projects and construction, planning, employment and private wealth.
‘Expenditure rose by 5% due to continuing inflationary pressure,’ the board added. ‘As a result profit margins were largely unchanged at 28% of revenue. Inflationary pressure has required the group to exercise careful management of costs and focus investment.’
During the year the group established a business transformation team to deliver ‘strategic projects and efficiencies’.
‘Challenging economic headwinds’ may delay improvement to some service lines in 2024-25, the board added. However, the firm forecast higher demand in core services in Malaysia and from a recently opened Singapore office. New investment is targeted at private equity, cross-border disputes, energy and sustainability, real estate and the firm’s ASEAN strategy.
Trowers ended the year with 141 partners. The highest-paid received £1.2m, up from £480,000 in 2022-23.
Moorgate-headquarted Trowers and Hamlins, which has over 1,000 people located across the UK, the Middle East and Asia, can trace its origins back to the 18th century. The addition of a Singapore outpost in 2024 took the firm’s number of offices worldwide to ten.
The firm has struggled to boost its bottom line in recent years, with profits hovering around £40m. In 2022-23 the pre-tax surplus fell 9.5% on the previous 12 months to £38.3m.
