Moore Stephens partner says it is ready to take on FTSE audits as revenues grow for third year
The managing partner of Moore Stephens, the UK’s ninth-biggest accountancy firm, has said the company is “well-positioned” to pick up FTSE-listed clients, as it announced revenue growth for the third consecutive year.
The professional services firm’s UK operation posted revenue of £137.5m in the year to April, a 13 per cent rise on the year before, and saw strong growth in its outsourcing and corporate advisory divisions.
British auditors are awaiting a decision by the competition watchdog on whether it will review the sector. Politicians have called for a break-up of audit’s Big Four firms – Deloitte, EY, KPMG and PricewaterhouseCoopers – in the wake of the collapse Carillion, the construction giant, earlier this year.
Read more: Pressure mounts on the CMA to break up accountancy’s Big Four
Break-up could present an opportunity for mid-size firms, such as Moore Stephens, to get a look-in at the valuable and prestigious contracts offered by the country’s biggest listed companies. Currently, the Big Four firms audit 97 per cent of the FTSE 350.
“We need to create a new awareness and really explain that there is a very valid choice outside the Big Four,” Moore Stephens managing director Simon Gallagher told Morning Wire “That’s a job not just for the challenger firms, but for the broader community thats interested in seeing more competition and stronger corporate governance exercised within the market.”
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“We think we’re excellently well-positioned in terms of picking up some potential FTSE company audits going forward,” he added. “We’re extremely interested in seeing that as a core opportunity should changes take place.”
Moore Stephens said its fee income had doubled since it merged with Chantrey Vellacott three years ago, with its audit and assurance service revenue rising by 11 per cent to £70.5m.
Gallagher warned of uncertainty over Brexit, but said he felt the firm was well prepared for changes in the sector and political uncertainty.
“I think our challenge is simply to respond to it,” he said.
The firm said it had made “continued significant investments in technology and resources”. Gallagher was optimistic about technological development, which has become an area of increasing focus at audit companies as they seek to improve their offerings to clients.
“I think we’re in the game early enough, and I think several of us within in the mid tier are at in a similar stage,” he said. “I expect that we’ll all land in a good place at the right time.”