A heavy programme of investment saw profits at BDO Stoy Hayward grow by only 4% to £72.5m even though revenues showed double-digit growth (10%) to reach £317m for 2006/2007.

'There is no point in asking for barriers in the market to be broken down and then cut investment,' said BDO managing partner Jeremy Newman. 'If we have to we will continue to squeeze profits to continue investment.'

Newman said the firm had made significant investment in people and had upgraded IT infrastructure to handle more sophisticated work and enable international working.

The firm has also invested in new office space in Leeds, Cambridge, Manchester, Birmingham and Scotland and will be moving into new premises on Baker Street in London next year.

The forensic services and corporate finance service lines showed the most impressive growth over the year, rising by 21% and 19% respectively. Assurance revenues only rose by 8%.

Newman said progress in breaking into the FTSE 350 audit market had been 'frustrating'.

'We are winning more non-audit work than audit work,' he said. 'We are doing more tenders, but sometimes I wonder if we are just invited to tender as the obligatory mid-tier firm.'

Further reading:

Read the full results announcement here

Read Newman's blog