The biggest conveyancing firm in the country slashed its workforce by more than a quarter as part of plans to take on less work, it has emerged.
The annual report for private equity-owned Simplify Moving, covering the year to 30 March, shows that the number of operations and administration staff fell by 27% to 1,413, cutting salary costs by more than £12m. Restructuring costs came to around £1.6m as the company’s workload was scaled back.
Simplify, which comprises eight conveyancing firms and two law firms (Premier Property Lawyers and Advantage Property Lawyers), is considered the largest specialist conveyancing business in the UK. In their strategic report, the directors say the group has faced ‘challenging’ and ‘difficult’ trading conditions. Shareholders have provided liquidity loans totalling more than £6m since last December, cash which also helped pay for AI and technology investments.
Trading pressures cited included the cost of living crisis, market uncertainty arising from global political unrest and rising mortgage interest rates putting downward pressure on the volume of people moving house. The business ended the financial year with net liabilities of £173m, with some £291m owed to creditors in short- and long-term debt.
As part of its retrenchment, the group reduced its property footprint by exiting leases on office buildings and reduced the staff cost base through redundancies and natural attrition. The report added: ‘This reduction in staff has reduced both the ongoing costs to the business as well as the amount of operational capacity available to undertake conveyancing work.’
Simplify did however post an underlying pre-tax profit for 2023-24 of £6.4m, excluding exceptional items, interest, depreciation and amortisation. This compares with a loss of £14.2m in 2023. The company’s operating loss fell from £24.1m in 2023 to £9.6m.
Simplify is owned by UK-based Palamon Capital Partners. The shareholders have also provided a legally binding commitment to provide a further £3.5m loan to the group if financial targets are not met by the end of next March. Permira Credit Solutions, which provides an outstanding loan facility of £76m, has agreed to defer £3.5m of interest payments (potentially rising to £7m).
Directors say they will limit the capacity of the business and recognise this will mean ‘panelling out’ a higher proportion of cases than normal.
Since the end of the financial year, Simplify says trading has been ‘very strong’ and it expects underlying profitability to double year on year. A spokesperson added: ‘We are implementing a programme of significant investment into technology and people to drive further improvements to speed and efficiency and to deliver an even better customer experience.’
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