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Interesting that in the background the Biles have been registering Ince company names on Companies House. One of the Directors at Axiom is ex gordon Dadds. You wonder how a firm like Axiom can buy Ince and where the funding is coming from. Is this a trojan horse for the Biles to get back into the business?
The Ince legacy non-contentious side has seen key member leave including Stephen Jarvis who famously went public calling the partners who had left, 'traitors". His number two has now gone and the rumours are that the head of Admiralty which used to be the flag ship of what Ince was about, is also on his way out. The latter may yet also see key assistants follow.
Long time since I was on here. Was shocked to see share price at 5p. I bought at 20 and sold around 65 but there was a time when things looked really back on track and that they were over the worse and the transparency they brought to the announcements re covid would be rewarded. Reading between the lines something is really off in Asia and HK in particular. Perhaps Paul Ho was out of his depth. I wonder whether the issue out there is collection. Billing looked great but have their Chinese clients been paying? Is there a black hole in the accounts? There is a scenario where Ince divest themselves of HK. It has its own partnership structure and perhaps it will be left to the partners out there to sort it. HK was the first overseas office that Ince & Co (ie the legacy firm) opened. It would be huge if it went. With more redundancies will come more resignations. Even Stephen Jarvis has left and he was a tied to the mast sink with the ship kind of partner. Seeing Ince articles relating to Dog Walking and Surrogacy are not your average out pouring of a city firm. Like Knights you have to ask whether the model of hoovering up distressed firms works. They are still distressed firms.
Throw in the hack which crippled them and is said to cost 4.9m and none of that is good. They even market themselves as cyber experts. That must be going well. Why is the insurance not paying now? What is all that about?
Someone also needs to ask if Donald Brown was at the Cardiff restaurant "that night" and what role he played. Otherwise that is another grenade to go off.
You have to believe that the backers will put in more funds if nothing else to bring down the average of their shareholding but be in no doubt this is a mess.
In terms of partner remuneration I recall from the initial buy of Ince that the Ince legacy partners were on fixed contracts for two years which must have come to an end in December/January. Now partner remuneration is much more tied to performance and collection. There will be some that were "over paid" for those years.
So no real growth in the top line in terms of revenue but held steady in the face of the pandemic and in circumstances where a couple of sectors have been really hit and they got rid of those sectors which they didn't think would recover. There will have been a cost to those redundancies. So we shall have to see impact on profit but equally spend on things like marketing will be down. I think they will be pretty pleased with that income. The Ever Given case (and cases like it) which people refer to isn't a game changer. It will undoubtedly generate good fees. But those will fall in this and next years figures. Also if you are a fee earner you can only work on one thing at a time. In so far as it is taking up a chunk of spare capacity then it will be profitable and they will be pleased to have been instructed but that is what they do and casualties generally are down year on year. Reference to tech initiatives which must be the cyber product but I would think that will take time to bed in. Potential to make money but that will be a slow burn. It will be interesting to hear and see the details behind the figures. Share price clearly still undervalued and I am still confident that we will get well over £1 by end July.
Not sure about 200. I think this certainly should be trading somewhere between 120 - 150. Usually get a good rise running into July but not sure what is going on behind the scenes.
Just been invited to a meeting on 1st Dec 1715 for update on half year figures. That would explain the rise as people buy into that news. Will be interesting to see if the price rises between now and then.
Am not sure I would read too much into the CEO buying shares in January. They needed cash and they got it a real discount on the market and I suspect that he did that to send a signal and no doubt the partners (ie lawyers) were also encouraged to buy. I think there has been real frustration that the value in the business has not been recognised and I think that whilst his honesty around covid hurt them ealier in the year I think they will be rewarded now. In contrast to Knights whose share price has defied the odds and yet there has been no real transparency around the effect of covid. At the end of the day Ince is being run by people with serious business acumen which it wasn't before. The underlying business is generating fees around £100m a year but of course the legacy Ince experience shows how quickly a firm can turn. However, what kills a law firm is a run on partners which is what they had. That has been stemmed although some redundancies are being made. I suspect they are looking at how they can cut the costs of an office on the 23rd floor which in terms of lifts etc makes it just about inaccessible in any numbers. Something has made this move but having new investors taking over 3% of the shares seems a healthy sign.
The 200,000 buy at 31p catches the eye.
Well spotted. I did ahead of the presentation but they have treaded water since then and I bought more a couple of weeks ago as teh price started to go in the right direction. So pleased to see them edging upwards for a second day. I would think that this is one of those stocks that should get a boost from there being a vaccine. Also I would have thought there will be news in December and that will tempt a couple of people who were watching this is in the summer to jump in. Interesting that other institutional buyers have seen enough to step in. Bottom line is that there are some solid figures behind this and we can assume that the cash crunch expected in the past few weeks has been avoided. I think 39 p is a realistic target and to get back to the placing price of 45p would book end the year nicely.
Anyone who has seen my posts on here knows that this is a sector and company that I know and have been reluctant to take a position. But I think this is a time to get in and so I have taken the plunge. I was also struck by the chart/analysis on another thread suggesting that this could go to 39p and I would take that in the short term.
Hope its not this guy:
https://www.moneymanagement.com.au/news/policy-regulation/refocus-financial-group-faces-asic
They have had to get rid of staff and fee earners in areas where presumably work has fallen off a cliff and is unlikely to recover quickly if at all. The core Ince legacy areas are busy. Its a well run business now and yes they may have some ups and downs to come but nothing like the disruption earlier in the year when another slew of partners left. I sense that they will be trying to divest themselves of some of the main office. I have added to what I have and a bit annoyed as I had set up a buy this morning and got distracted but even a modest rise towards 45p will be a good result. This should be a stock that will benefit from a vaccine bounce. I would rather buy here than Knights where I still think there is bad news being sat on.
I have dipped a toe in the water here.
I feel that the news will be more up beat.
Sorry it should say "banned" discretionary spending
Had a look at Knights Group.
Hadn't really focussed on them before. Similar business model. Acquisition (although not so much emphasis on distressed companies) of other companies and centralising costs. Outside M25 and scooping up provincial firms in a certain category.
I will have a more detailed look. Two things that jumped out of results on first reading. Firstly, a lot of shares held by one person. Worries me a bit. Also the results make clear that the company have not attempted to gauge the effect of covid going forward. Ince I think are being penalised for that. Knights have cut board pay by 30% and made similar cuts of salaries and based discretionary spend. That does not suggest a firm that is not being hit both one income and collections. This does not have the diversity of an international firm with overseas offices. Some good clients they say like Roll Royce but RR are being hammered in Derby.
I don't know if they had a similar Q & A but my first reaction is that these guys are over valued and the share price is based on last year's performance. But there is absolutely nothing being offered about the effect of covid on their income. Watch this space because I am not sure any of that is factored in. As I say that is very much a first impression.
Jaftrade
Just a point about "partner" remuneration.
In a partnership (or LLP) the partners are exactly that and share the profits. They usually take a monthly drawing which is effectively an on account payment of profits. That means they have monthly income with profits being distributed in the following financial year or indeed the one after that. That always means there is tension when fee income is down because you are distributing profits from a decreasing pool of money.
The thing about partnerships is that profits are always distributed and you cant really keep money for a rainy day. The only you can do is recapitalise so the partners have to put in more working capital. So the mantra is about getting lock up down.
At Ince its is not really a partnership. So the "partners" have to be remunerated and that means they set up a contractual formula which will mean that you get paid based on cash collected and not just bills rendered. That was what they were saying the the cash position improves at year end. Partners push for bills to be paid.
The problem about that is that you tend to be much more likely to put your arms around a client and not let anyone else in. There is nothing collegiate about an eat what you kill system. So they seem to be explaining a system whereby they also get some credit if their client (and I am not sure how you decide whose client is whose as many are legacy clients) uses other departments.
But the more you bring in the more you get paid and as they said the aim is to have business development hungry lawyers. But it is a tricky system to get right and to make sure people behave collegiately. The other system is lock step where you get paid more by dint of seniority and that actually works because the clients are the clients of the firm and they are passed down the chain. Very few lawyers really understand why that should work well. The tensions there are where the young bulls resent the elderly elephants and yet it is the elder elephants who know where the water holes are.
As I have said below 16m does not strike me as very much. It probably means that there are a golden few who earn a lot but others who will be paid relatively modestly. But profits are being deferred and that makes those who are the big earners restless.
Got to go and cool down.
Am tempted to buy at these levels as a punt but I think i will wait and see a little longer.
I have listened to the presentation. No doubt that the guys in charge are serious people. Their model is to drive costs down helped by moving the support function to Cardiff and that has spare capacity so adding partners and acquisitions does not require a commensurate increase in cost. Overseas offices have been a drain on money and that is being addressed by lateral hires. In particular tier 1 partners who I now understand are defined as having a following of £1m. Not sure how many of those are really going to be moving. They will be attracted by brand and of course remuneration. On the latter that is based mainly on an eat what you kill model but there is an element which allows for reward where "your client" generates work for others. A sort of reward for internal collaboration which is a hybrid of what I think the Biles model usually allows for. Traditionally there is a rule of thumb that only about 50% of lateral hires work as hoped. That may be different in a firm which has so much by way of acquisition. Business model depends on fee income increasing and that is not going to be acheived only by organic growth alone.
As I understand what they are saying is that the budget agreed in january was based on the organic growth which they would say was around 5%. I am pretty sure that the reference to pre covid business levels being achieved already applies only to the Far East and China. That is not across the board. I may have mis heard that but that was said in the context of explaining China.
Bits of UK such as Real Estate, transactional work and family down and that was not just because of covid but the wider issues of brexit. Collections were a theme but the figures are set out in a conservative way.
If you take the profit plus the partners pay (which in a traditional firm would be the total profit) then that gives a figure of about 23m. If you look at the old Ince accounts say to 2012 then they achieved 34m on a 91m income. In fact they achieved 24m on 88m income in the year before they were taken over.
That probably reflects the drain of the overseas offices and the partner attrition. It also reflects the challenge of turning this around. I think they do have a strategic vision of how to achieve and it will be interesting to watch.
Ian B: No agenda and I don't have any shares and i hope that no-one could say that I am ramping either way which is always a posters ultimate sin. I have always tapped into LSE simply because I have thought it was more London centric and was interested to see what people were saying and I have had times where I am an enthusiastic holder of various shares usually on a punt type basis but actually when the March drop came i sat on stuff which I shouldn't have done. I had real fun back in 2000 a respectable amount and then lost it which my wife never lets me forget. Most of my holdings now are unit trusts in ISAs and actually I was over weight in Pharmas and unbelievably didn't lose anything over the past few months which was more by luck than good judgement.
I joined because for the first time I actually thought i had something to contribute so I jumped in.
What I would say is that the Group is led by real business men rather than lawyers trying to be business men. I think they will be much more ruthless in how they go about turning this around. I do think Q2 is going to be challenging but I cant see how the price goes any lower. They must hold on to the established shipping partners although I think all those that wanted to go have gone. That will be the barometer for me so I if see something i will post. I don't think I would buy now because there is more fun to be had elsewhere including silver and bitcoins. However, as a punt at the end of the summer if things havent got worse in the world I might be tempted just so that I had some skin in the game. I think the price has factored in the present difficulties and an upbeat message at H1 would see some confidence return.
Everything I write is from public sources and some of the stuff is in the legal press and doesn't filter through. People moves are public:
https://www.law.com/international-edition/2020/02/14/ince-hit-by-eight-partner-walkout-four-sector-heads-to-exit/
But that was announced in Feb but they didn't leave until around June. So if you then google the names of those that leave you can see where they go. Also in the results you will see a management fee paid to Stand Marine. You can then see that is Faz Peermohameds vehicle which GD also took over:
https://www.stann.com
So that is now a competitor and filled with ex Ince people. The point is that the results do not (for obvious reasons) deal with these issues. I maybe that investors were asking about them but the response is likely to be that Julian Clark is recruiting "tier 1" partners....whatever they are.
I don't have any stake in the company at all but I do know the sector. I have been on these chat rooms for years but it is a sector and company I know and it was interesting to me to see how people talked about a company and the speculation. II know how law firms work and so few are listed. I have done pontificated in the same way on other companies but I have really come to appreciate how little we know. But on this one I do have real insight I think and am happy to share that.