BDO has seen its underlying revenues hit £428m in the year to 30 June 2017, an increase of 5.7% compared to £405m last year, while for the second year experiencing double digit profit growth
The firm's profits increased by 11% to £87.6m, down from the 22% growth seen last year, which saw it rise from £65.6m in 2015 to £80.3m. However, average profits per equity partner (PEP) grew 22% to £454,000, up from £360,000 in 2016.
BDO appointed 25 new partners from other firms in the last financial year and promoted an additional 15 in July. The firm also promoted 1,175 people – a third of its total UK headcount – and has just recruited another 280 trainees into the business.
BDO managing partner Paul Eagland told CCH Daily their results in 2016 were boosted by a ‘changing regulatory market’, particularly in audit following the EU’s Audit Regulation and Directive (ARD).
Audit is still the largest part of BDO’s business, increasing revenues to £150.7m after seeing 5.4% growth this year. Tax, meanwhile, reported a 7.4% increase in revenues to £135.2m in the last financial year, with the firm again citing ARD as a key factor in allowing it to make gains in the public interest entity (PIE) market.
BDO’s advisory revenues grew 4.5% to £141.9m, unhindered by concerns around Brexit.
Our clients have remained really active despite the Brexit backdrop creating a huge amount of uncertainty and our financial results are a reflection of all of that activity,’ he said. ‘It is better than expected.
‘Back in May or June 2016, there were a lot of conversations about Brexit and a lot of commentators saying it wasn’t going to happen, and of course a high percentage of our clients didn’t want it to happen. Of course 23 June came along and the answer was different. We were then apprehensive about the year ahead, but as time went on – and it became clear early on – that despite the uncertainty, businesses were determined to remain entrepreneurial.’
With that in mind, this year’s results while satisfying, Eagland said, but they are a return to the line of best fit after 22% growth in profits between 2015 and 2016.
‘As you increase absolute profit, growing be 22% would be very unusual, and 11% we’d say is a really great result,’ he said, having presided over his first full year as managing partner. ‘We had some great projects in 2016 and we did again this year, but at the same time we also decided to make a lot of investments this year and that impacts on profits. We think we’ve done quite a good job of balancing making more money with building for the future.’
Report by Calum Fuller