Gordon Dadds, the second legal business to be listed on the London stock exchange, started its first day of trading on Friday with shares fluctuating between 145p and 147p.
The London legal company, which is valued at £18.8 million, joined the Alternative Investment Market on the London exchange in a placing that raised £20 million. The original placing price of individual shares was 140p.
In a statement the firm said that the £20 million would be used for acquisitions, working capital in support of anticipated future growth and repayment of debt. The statement described the former law firm partnership as “an acquisitive London based legal and professional services business with a twin track consolidation model to integrate mid-market law firms under its Gordon Dadds LLP brand, and to acquire smaller firms who continue to trade under their own name via its Prolegal acquisition vehicle”.
The business had revenues last years of £25 million with £2 million adjusted profit before tax. It’s statement described the UK’s legal services market as being “poised for increasing consolidation”. It claimed there were 1,000 law firms in the country with annual revenues of between range of £2 million and £40 million, which it considered to be its target acquisition market.
The only other law firm listed under in its own right on the London exchange is Gateley, which floated about two years ago. Its share price has risen from 100p at listing to a peak of nearly 196p in June. Its current share price is around 172p.
However, the woes of Slater and Gordon, the Australian legal services company with a large presence in the UK, continue after it became the world’s first law firm to float. The business, which is listed on the Sydney stock exchange, has a share price of about A$0.08 after having peaked in April 2015 at A$7.85.
Simpson Millar umbrella group heads for administration
Elsewhere on the London exchange, the national law firm Simpson Millar attempted to calm clients and the market by issuing a “business as usual” statement after its publicly listed parent company said it was going into administration.
Fairpoint Group, a financial services business, bought the law firm in 2014, when it said “Simpson Millar will now have enhanced capability to execute its strategy of consolidation, targeting appropriate legal services businesses around the UK”. Fairpoint’s shares peaked at 192p about two years ago, but trading in the company was suspended in June when the share price collapsed to 10p. In a statement to the London exchange on Friday, the business blamed an “onerous lease on the group’s head office” for its financial difficulties.
However, in a statement on Friday, Simpson Millar said that it was “independently financed”, having secured a receivables funding facility of up to £5 million with Doorway Capital, a specialist provider of capital to law firms. The firm said that facility provided “additional working capital for Simpson Millar which will enable it to take advantage of the growth opportunity presented by the size and highly fragmented nature of the consumer legal services market-place”.