BDO profits jump as partners enjoy pay rise
BDO has reported a double-digit rise in profit and revenue for the last 12 months, as the accountancy giant ramped up the pressure on its larger under-fire Big Four rivals
The beancounter enjoyed its seventh consecutive year of growth after profits rose 26 per cent to £134m and revenues jumped 25 per cent to £578m.
Read more: FRC watchdog probes EU audit of Thomas Cook accounts
A merger with Moore Stephens late last year transformed BDO into Britain’s biggest accountancy firm outside of the Big Four peers KPMG, Ernst & Young (EY), Deloitte and PricewaterhouseCoopers (PwC).
Profits per partner climbed 8.7 per cent to just over £600,000 over the last year.
BDO’s managing partner Paul Eagland told Morning Wire: “It’s been a landmark year…if we had set out three years ago to achieve what we achieved this year, this would have been our dream outcome”.
Eagland put the rise in growth down to the firm’s long-held focus on mid-market companies: “I think our success is because we have been working alongside that market for a long time – they were agile enough to deal with consequences of the financial crisis and have grown more quickly and more profitability than the other big FTSE or micro businesses.”
The results come at a critical moment for the audit industry, which faces a major shake-up following a number of high-profile scandals such as BHS and Carillion.
Read more: Audit watchdog beefs up standards
Reforms to overhaul the sector are expected, after the Competition and Markets Authority recommended a split between audit and advisory divisions at the Big Four firms as well as mandatory joint accounting for all large FTSE companies.
Eagland, who said that negative publicity has partly turned employees away from the sector, fears that reforms to the audit industry could be undermined by a shortage of staff: “If [the reforms] require even more people to do more work, where are those people going to come from?”