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Landmark year for BDO: merger and investments create largest UK accountancy firm focused on entrepreneurial businesses

8th October 2019, 9:56 am

Accountancy and business advisory firm BDO LLP, which has offices in Manchester and Liverpool, has posted revenues of £578m, a 25% increase on the previous year, it announced today. 

Marking a seventh consecutive year of growth, this headline figure represents 15% organic growth, as well as a 10% boost following the firm’s successful merger with Moore Stephens LLP in February 2019.

BDO’s profits increased by 26% to £134m. This substantial uplift – which includes five months of post-merger profits – will enable the firm to continue to make significant investments in its people and technology, including £4m on developing data analytics and audit processing software over the coming year. Average distributable profit per partner (PEP) increased 8.7% to £602,000(2).

Investment in people has been a key business priority. This year, BDO promoted 13 partners internally, including Steven Roberts who was promoted to audit partner in the North West. The firm also appointed 14 new partners from other firms, counting tax partner Liam O’Doherty and M&A partner Rob McCann amongst the new appointments made in the region. A further 1,500 promotions were made across the business, representing almost a third of BDO’s UK workforce, while 390 trainees were recruited – including a record cohort of school leavers.

In the North West, the firm has continued to build on its market-leading credentials advising fast-growing, entrepreneurial businesses, AIM-listed companies and private equity funds and portfolio businesses, as well as further strengthening its expertise in the technology, real estate, manufacturing and not-for-profit sectors.

Ed Dwan, partner and head of BDO in the region said: “It’s been a landmark year for our business with continued organic growth being enhanced by our merger with Moore Stephens LLP. This is reflected within our region in which we’ve seen strong growth across the business, creating the leading accountancy firm advising entrepreneurial mid-sized businesses, and a firm that can confidently challenge its larger competitors in all areas of audit, tax and advisory work.

“There’s more to accountants than numbers – our clients buy our people – which is why we continue to prioritise investment in them and our culture. In the region, we’ve placed an increasing emphasis on creating a great and supportive place to work, allowing our colleagues to achieve their own ambitions with a clear sense of purpose. Initiatives include our partnership with the Salford Foundation which sees us welcome 1,100 schoolchildren into the office over summer to learn social and financial skills – a hugely rewarding scheme for our team.

“Alongside our talent, our technology enables us to help our clients succeed. Our strong financial performance in the UK, as well as our membership of a successful global network, has also enabled us to make further investments in audit processing tools, data analytics and robotics. This enables our people to spend their time advising clients on more specialised and complex matters.”

Last month, BDO also announced further expansion in Liverpool with a second office in the city at One Tithebarn Street. Now employing more than 250 in Liverpool, the new office will allow for around 150 additional roles, which cements the firm’s commitment to the city.

BDO puts its success down to its focus on its ambitious and entrepreneurially-spirited client base, which has remained resilient despite the uncertain political and economic backdrop, as well as the firm’s people, who continue to deliver a world-class service to their clients. The merger with Moore Stephens LLP has further cemented BDO’s market position as the UK’s leading auditor to AIM-listed companies. BDO also became the third biggest auditor of listed entities in the UK following its completion of the merger in February and a number of significant audit wins throughout the year.

Growth across the business

All three of the firm’s service lines – audit, tax and advisory – witnessed a strong performance this year.

The audit business posted revenues of £200m, up 25% on the previous year, having extended its lead as the top auditor for AIM-listed companies in the UK overall and in the North West. BDO also became the third biggest auditor of listed entities in the UK following its completion of the merger in February and a number of significant audit wins throughout the year.

A sustained focus on quality has helped drive audit growth. For a second consecutive year, BDO achieved the highest score in the Financial Reporting Council’s (FRC) Audit Quality Review of the major accountancy firms. To build upon this success and meet the demands of the evolving regulatory environment, the firm has committed to invest £20m in its UK audit practice over the coming year. This will include a £4m injection into professional training programmes, and a further £4m on developing data analytics and audit processing software.

The tax business reported growth of 20%, generating revenues of £168m, with tax compliance and risk advisory services in increasingly high demand. Private tax advice was another key part of this growth, and BDO now operates one of the UK’s leading personal tax practices.

BDO’s advisory revenues grew by 30% to £210m, fuelled by a buoyant private equity community. A high level of deal completions in M&A were also driven by the firm’s strong sector credentials. And, across the rest of the advisory practice, forensics, tax dispute resolutions and valuations all performed well.

Ed Dwan added: “Our client heartland remains the UK’s entrepreneurially-spirited mid-sized businesses, which is the economic engine driving our economy. We relish the challenges our clients give us, and are grateful for the trust they place in us.”

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