Landmark year for BDO: Merger and investments create largest UK accountancy firm focused on entrepreneurial businesses
Accountancy and business advisory firm BDO LLP 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 and appointed 14 new partners from other firms. 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.
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, and enhanced the firm’s expertise in sectors including financial services, insurance and shipping.
Paul Eagland, BDO Managing Partner, said: “We have had a landmark year, with continued organic growth being enhanced by our merger with Moore Stephens LLP. Together, we’ve created a leading UK accountancy firm advising entrepreneurial mid-sized businesses – but also a firm that can confidently challenge its larger competitors in all areas of audit, tax and advisory work.
“Accountancy isn’t a profession solely about numbers. Our clients buy our people, which is why we continue to prioritise investment in them. I’m proud we’ve promoted nearly a third of our people this year and welcomed a record number of school leavers.
“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.”
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. BDO also became the third biggest auditor, by number, 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.
Paul Eagland 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.”