Leasehold debt collector JB Leitch received £470,000 furlough, and paid out a £500,000 dividend to owners

The April 2021 company accounts of leasehold debt collector JB Leitch show that it received £470,000 of taxpayer support through furlough, and Government Business Interruption Loan Scheme borrowing of £845,652 (assuming no other borrowing).

Nonetheless, the number of employees reduced from 143 to 114.

All in all, a good year for founder Jonathan Leitch, who according to the confirmation statement at December 2021 owned 75% or more of the company, with a shareholders’ dividend of £500,000. In 2020 the dividend was £400,000.

On a turnover of £5.8 million, JB Leitch made a gross profit of £5.6 million, with an operating profit of £1.1 million. Profit after tax was £868.030.

The accounts show that the operating profit is stated after crediting the furlough money, meaning this increased operating profit from around £640,000 to £1.1 million.

Page 15 of the accounts (below) shows furlough money of £444,871 taken in the year 1 April 2020 to 31 March 2021; with £26,005 taken in the year 1 April 2019 to 31 March 2020. So total furlough was £470,876 during scheme’s operation.

One of JB Leitch’s major clients, FirstPort, also collected £286,000 in furlough money in the year ending 31 December 2020.  FirstPort turned a gross profit of £64 million on a turnover of £67 million in the same year.  FirstPort did not pay any dividends, but did pay interest and management fees to its then owner, the private equity fund Equistone.

Rendall & Rittner, another giant managing agent, claimed £660,137 in furlough in the year to 30 June 2020.  The company paid a dividend of £250,000 in the same period.  Rendall & Rittner also turned a gross profit of £66 million on a turnover of £68 million in the same period.

There is no restriction on companies taking taxpayers’ furlough money while turning a profit or paying dividends.  Many companies that benefited from furlough money and turned a profit returned their furlough grants to the Treasury.  Examples of those returning money include supermarket chains and law firms.

The related party disclosures at the end of the accounts declare Tiny Pig and Hastenhome Property involved in transactions with JB Leitch.  Both Tiny Pig and Hastenhome describe their businesses as letting residential property including several flats and garages in Campbell Square, Liverpool and Argyle Street, Liverpool. Loans from NatWest and A. J. Bell Trustees are secured over some or all of those properties. According to Hastenhome Property’s accounts, the portfolio is worth £1.8 million. Hastenhome / Tiny Pig are both majority owned by Jonathan Leitch.

Another related party, Stiles Developments Limited owns, with the assistance of a bank loan from NatWest, a £2.2 million block of shops and offices in Ormskirk:  https://www.realla.co.uk/details/18566979 is also majority owned by Jonathan Leitch.

All of these related party transactions involve money being loaned by J B Leitch to the other companies. This means income from legal fees has provided the deposits to enable bank loans to be raised to buy all of these properties.

Concerns have been raised about the fees JB Leitch charges in pursuing leasehold debts.

Justin Madders, Labour MP for Ellesmere Port and Neston and a patron MP of LKP, named JB Leitch in the Commons in January 2020, claiming it had loaded unpaid ground bills by 222%.

JB Leitch loaded leasehold ground rent debt by 222%, Justin Madders tells Commons

JB Leitch 2020-2021 Accounts:

https://www.leaseholdknowledge.com/wp-content/uploads/2022/04/JBLeitch2021Accounts.pdf