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Co-op Legal Services reports £3.4m loss

Loss follows profits of only £26,000 for the whole of last year

30 August 2013

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Co-op Legal Services (CLS) has announced losses of £3.4m in first six months of the year, according its half year accounts published yesterday. CLS made a profit of £700,000 in the same period last year.

Revenue for the first six months of this year rose by 5.4 per cent to £18.1m from £17.1m for the same period in 2012. The firm said the results reflected "the start-up nature" of the business.

CLS recorded profits of only £26,000 for the whole of last year. The lack of profit was attributed to "significant investment for future growth, changes to both pricing of services and the nature and duration of cases".

In this year's half-year accounts, CLS said: "Our recent success has been driven by probate revenue outperforming expectations and the award of legal aid contracts in family law."

This "provided the business with the opportunity to contact more than 1,500 legal aid clients since April".

In June, CLS launched a multimillion pound cross-platform ad campaign across television and radio. In its statement the company said the initial results showed "increases in awareness", but didn't indicate the level of response received.

The Co-op group as a whole announced losses of £559m for the first half of the year, having written off £496m of bad loans at Co-op Bank. In May, the banking group's debt rating was downgraded to 'junk' by Moody's.

The Co-op's legal arm maintained that they wouldn't be affected by the bank's troubles, telling Private Client Adviser's sister title Solicitors Journal at the time the bank listed on the Stock Exchange that expansion plans would continue.

A deal to buy 600 Lloyds branches collapsed in April, soon after CLS announced an expansion of its family service.

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Legal services Wills, Trusts & Probate