SAN FRANCISCO: BDO, the accountancy and consultancy firm, delivered double-digit revenue growth in its latest financial year, boosted by 19 mergers.
The company said on Wednesday that revenues in the year to September 30 had risen 13 per cent to $7.3bn, partly driven by a 29 per cent rise to more than $1bn at its US firm.
Martin van Roekel, global chief executive of BDO, said: “It’s a combination of organic growth and mergers and acquisitions. Doing M&A helps to increase our revenues, but it fuels organic growth at the same time by helping us be able to offer our clients a wider range of services.”
Consolidation has taken place among the mid-tier accounting and consulting firms in recent years as an increasing number of global companies look to work with international professional services companies.
This has been exacerbated by increasing costs, a shortage of employees and more regulation. This week, BDO announced it had bought the audit and outsourcing practices of Baker Tilly’s Brazilian member firm.
As with its larger competitors, BDO’s advisory business is growing faster than its audit practice. Key growth areas within advisory are forensic services, which address fraud and corruption, and risk advisory services, which focus on companies’ internal controls. Revenues in audit and accounting dipped slightly to 59 per cent, while the tax share of the business remained more or less unchanged at 20.4 per cent.
Europe, the Middle East and Africa was the weakest region, with sluggish revenue growth of 3 per cent reflecting macroeconomic concerns across the region.
Mr van Roekel said that uncertainty surrounding the UK’s referendum on its membership of the EU could take its toll on investment: “If companies have to make a decision where to base their European headquarters, a possible UK exit from the EU is a factor that plays a role in the decision-making process.”
Despite concerns about a slowdown in the Chinese economy, revenues in BDO’s Asia-Pacific region grew 10 per cent. Mr van Roekel said: “It’s surprising to see that in China in many aspects it’s still business as usual. Our growth is coming from building more advisory services, realising more organic growth, and bringing on partners and staff from other firms.”
In Europe, new regulation is beginning to bite. This demands that listed companies tender more frequently for audit mandates and restricts the non-audit services that accountancy firms can provide.
Mr van Roekel said: “BDO has been active in many of the tendering processes. It offers interesting opportunities for delivering tax and advisory services in those occasions where you’re not picked to take over the audit of a company.”
