Gillespie offsets dive in housing market but flat profits ahead

Published on Monday 24 November 2008 20:50

LAW firm Gillespie Macandrew is expecting flat profits in its current financial year, after revealing it was suffering a 30 per cent reduction in sales at its Hunter's estate agency arm.

The firm – which recently axed four of its property staff as a result of the downturn in the housing market – said its commercial team and financial services were performing well, offsetting a reduction in property.

In its latest set of accounts, the Edinburgh-based practice revealed a 20 per cent rise in profits to 3.6 million in the 12 months to 29 February, 2008 on turnover of 10.5m – up 14 per cent on the previous year.

Gillespie Macandrew – which employs about 140 staff, including 22 people of partner status, in its three Edinburgh bases – merged with Haig Scott during the period, its fifth deal in as many years.

Managing partner Ian Turnbull said: "Five years ago, our turnover was 3m and now, thanks to a combination of considerable organic growth and strategic mergers, we've hit 10m for the first time in the company's history.

"It's this growth that has cemented our position as one of Scotland's leading mid-sized law firms."

He added that although times were tough, the firm was weathering the credit crunch in the year to February 2009.

He said: "Turnover generally will be good, considering. We would expect a static year overall, which will be a good result in the current climate."

He claimed that, while estate agency turnover was down, Hunter's, which the firm bought in the previous financial year, was outperforming other Edinburgh agencies.

The merger with Haig Scott last year boosted the launch of the firm's specialist housebuilder team, which Turnbull said was "positioning itself" for when the property market returns to growth.

"We will not benefit as much from the housing team this year as we did last year, due to the current situation economically. However, we have attracted three new housebuilder clients in the past three to four months so we are positioning ourselves to be well placed for when the market returns."

Turnbull revealed that the firm was planning to expand its private client business over the next few years.

He said: "I don't know yet by how much we will expand it, but it is a growth area for us. We are increasing our market share in that area, as well as the amount of funds we have under management."

He said the firm forecast growth in most areas over the current year, particularly in private client and litigation.

Gillespie's wage bill rose to 3.6m for the year to the end of February, up from 3.3m the previous year, while the highest paid partner pocketed 289,476 – a near 30 per cent rise on the previous year.