Company slashes bill for staff and directors as profits stay steady

Spending cuts enabled independent broker Perkins Slade to post a 2009 pre-tax profit roughly in line with its 2008 result.

The Birmingham-based company made a profit of £141,159 for the year to 31 August 2009, only slightly below its 2008 figure of £141,898. This was despite a 5.2% fall in turnover to £6.8m, which the firm blamed on the recession.

Perkins Slade managing director Nick Tamblyn said most of the company’s savings have been made by not replacing those staff and directors who left the firm, and cutting bonuses and freezing pay.

Staff costs, including directors’ wages, fell 14% to £4m in 2009 from £4.7m in 2008. Within this amount, wages and salary, the largest element, fell 14.5% to £3.3m.

Perkins Slade chairman David Slade wrote in a statement accompanying the results that, since the year-end, the company had made six redundancies, two of which were voluntary.

Tamblyn said: “Perkins Slade isn’t the kind of business that would go lightly into wholesale compulsory redundancies.

“It is more about how you manage your cost base, which will often mean not replacing staff and not putting in annual pay increments that you would have done in non-recessionary conditions.”

Directors’ emoluments slumped 37% to £491,256 from £787,246. Board director John Wade left during the year and was not replaced – his responsibilities were taken over by the company’s associate directors.

In addition, Harry Towers resigned from the board on 31 December 2008, and Frederic Wade on 31 January 2009. Andrew Smyth and Larry Maxted both stepped down from the board in 2008.

“Directors leaving and not being replaced both in 2008 and 2009 contributed to a reduction in directors’ emoluments,” Tamblyn said.

Perkins Slade made a small operating loss of £15,302 in 2009, compared to a £232,347 loss in 2008.

Tamblyn said Perkins Slade has returned to operating profitability in 2010 and aims to make an operating profit for the full year on the back of cost reductions made in 2009, rather than revenue growth.

Tamblyn said clients are still going through a recession, making revenue growth difficult. “Revenue has stabilised, but we have managed to get back to operating profitability.”