Although the rise is slightly down on the past two years (13% in 2013 and 10.6% in 2012), it is still impressive when compared to the recent results of the Big Four, beating top performer EY's 8.6% growth
Grant Thornton’s chief executive Scott Barnes says that he is particularly pleased because the firm has broken through the £0.5bn barrier a year earlier than outlined in its strategy, Ambition 2015. “[This] is a clear testament to the hard work of all our people.”
There have been a lot of mid-market transactions and we did more than anyone else
He puts the firm’s success down in part to the fact that during the five or six years when the economy was in the doldrums, it continued to invest in areas where it is strong and to take on new people. “Those transactions are beginning to pay off. We’ve had really good results from our investment in public sector, financial services and the advisory business.
“The other factor is the slightly improving economy and the fact that London and the South East tend to perform resiliently. Having said that our regional practice has had a very strong year as the economic recovery has spread out across the regions.
“Our brand is very strong in the mid-market,” he adds. “There have been a lot of mid-market transactions and we did more than anyone else.”
Star performer was advisory which grew by 15%. Audit was up by 4% and tax was “broadly flat”. This last, Barnes said, was partly down to a reluctance on the part of companies to get involved in anything that might smack of tax avoidance.
Profits rose by 7.7% in absolute terms and pre-tax profit per partner (on a like for like basis) was up by 15% to £402,000. Distributable profit increased by 10% to £385,000 after accounting for the changes in taxation of employee services companies which were implemented in April.
The firm also reveals that its total tax contribution to the Exchequer was £169.4m and that each partner paid an average rate of tax of 42.5%.
Barnes reveals that Grant Thornton International is in the process of implementing a new audit methodology on a global basis which is key to the firm’s future audit practive development. In the UK, audit represents some 30% of overall revenue whereas globally it is a much larger contributor at 45% to 50%.
He reports a hike in the number of audit tenders compared to the rate “as far back as you like to go”. “We’ve been approached by a number of large listed companies, some of which we have accepted and some of which we have turned down where we don’t know the business well or we are not familiar with the sector.
“We are having to be fairly discriminating but are expecting the rate of tenders we are approached about to increase."
The firm has won a number of new audit clients, including FTSE 250 company Interserve, insurers Simply Health and Fullers the brewers.
Barnes also highlights the inroads that GT is continuing to make into the public sector audit market, particularly following the acquisition of data analytics business, Local Futures group.
He predicts that the economy will continue to improve over the next 12 months but warns that in the run-up to the election, an element of uncertainty is likely to creep in which could result in companies “sitting on their hands and not doing transactions”.
However, he adds, “We are strong in mid-market companies and financial businesses. If you look at what happens in weak economic conditions, it’s the mid-sized businesses that are more resilient. So we tend to be the bell wether and I have to say it feels good. We run a fairly tight ship and the business is in a good place.”