Stricken listed City firm Ince Group is set to enter administration after losing the support of a major creditor. In a statement to the London Stock Exchange this afternoon, the company said it had ‘regrettably concluded’ it had no choice but to appoint administrators to protect the interests of staff.

Staff from insolvency specialist Quantuma will be appointed as administrators with the intention of selling the business to a third party as soon as possible.

The announcement marks the biggest collapse of a listed firm since the market was liberalised to allow external shareholdings. Ince has repeatedly put back the publication of annual results and the audit process for the year ended 31 March 2022 is still not completed. Shares have been suspended since the start of this year.

Ince Group plc told shareholders today: ‘The length of the auditing process has put increasing pressure on the cash flows of the business. As a result, the company has been holding discussions with its major lender and other creditors, including HMRC, to establish their level of support.

‘The company has now been informed by a major creditor that it will no longer continue to support the business and, as a result, in order to preserve the future value of the group's business and to protect the interests of employees and other stakeholders the board... has regrettably (sic) concluded that it has no choice but to place the company into administration.' 

The directors of the company and each of Ince Consulting Holdings Limited and Ince Gordon Dadds Services Limited and the members of Ince Gordon Dadds Holdings LLP and Ince Gordon Dadds LLP resolved today to file documents with the court to appoint an administrator.

Shares in Ince Group plc remain suspended at 5.15p.

Ince is one of the biggest law firms to have entered administration in recent years. As of 2021, when the latest accounts were produced, the company employed 701 people and had 338 fee earners. But the 2021 figures indicate financial difficulties: the firm reported profits of just £300,000, on revenue up by 4% to £100.2m. Diluted earnings per share were just 0.5p in 2021 down from 11.4p in 2020, and net debt remained above £6.5m.

Profits bounced back in the six months to 30 September 2021 – increasing by 9.4% - but this was followed by a nightmare 2022 characterised by cyber attacks, profit warnings and a tumbling share price.

Ince announced in May last year that revenue was below expectations as the long-term effects of the pandemic, the Ukraine conflict and an attack on its IT systems took their toll. Shares fell almost 15% in three hours following the warning to 71.5p.

Last August, the business resorted to raising £9.5m from investors to stave off ‘financial difficulties’ – a decision which caused its share price to be slashed by half and preceded the departure of chief executive Adrian Biles. Three months later, it had to sell subsidiary Arden Partners for just £1m to raise funds. It had spent £10m acquiring the firm the previous year. 

The business in its present form was created after listed firm Gordon Dadds completed the pre-pack acquisition of City practice Ince & Co at the start of 2019. The sale was estimated to be worth £27.3m – payable over four years – and involved Gordon Dadds borrowing £12.5m. Ince & Co had been at risk of intervention after partners opted not to raise the £8.5m needed to prop up the ailing business, it was later revealed.

 

This article is now closed for comment.