The new chairman and CEO at Cooper Parry discuss succession planning and targeting the firm's core markets
A MANAGEMENT RESHUFFLE normally conjures an image of a firm on the ropes. All too often it is associated with bosses carrying the can for a failed corporate strategy or disastrous acquisition; when the fee income collapses, heads have to roll.
So when Cooper Parry, the top 50 accountancy firm, announced it was replacing its chairman and chief executive in one fell swoop alarm bells started to ring. However, the firm had posted a 10% increase in fee income for the year ending 2012, while scooping the mid-tier firm of the year award at the British Accountancy Awards; clearly, not a firm in trouble then.
In fact, the change in management – announced in May – included only the firm’s exiting management team. Chief operating officer Ade Cheatham took the chief executive role from Jeremy Bowler, after 15 years in the top seat, with Bowler replacing Colin Shaw as chairman having served three terms.
According to Bowler, taken on its own the reshuffle was a “small event” and was simply “logical progress” on the firm’s work over the last four years and would not herald a change in direction for the firm.
“We will continue to push on with our ambitious plan to grow geographically and by service line,” says Bowler, who adds that Cheatham, who joined the firm in 2004, had been identified as a “natural successor” years ago.
“We identified Ade as the next successor three years ago,” says Bowler. “We work so closely together it has been a smooth transition. Taking on the role of COO freed him from managing clients to get more involved with the management of the firm.”
For Cheatham it will be business as normal for the Midlands-based firm, just more of it. Centred in the east-midlands, the firm acts as auditors and advisers to more locally-owned private businesses in the region over £5m than any other similar firm.
The firm’s strategy is aggressively to pursue its core market, almost to the exclusion of all else, Cheatham explains.
“We put all our effort and focus into our core market of £5m to £50m turnover businesses,” he says. “Where will go next? We want to move up the food chain to £50m and £100m businesses.”
Though able to draw upon international knowledge and connections through its membership of PrimeGlobal, the third-largest association of independent accounting firms, Cooper Parry’s focus is very much centred on the Midlands with offices in Derby, Leicester, Nottingham and London.
Local press articles have speculated that the firm is considering merging its Leicester, Nottingham and Derby offices into one building near Castle Donington. While Cheatham will not comment on the move directly, he does admit the firm is aiming to be the number one player in the midlands market within the next three years, and that a “physical presence” in the area would be advantageous.
At the same time, the firm aims to increase its market share in the east Midlands by 50% during the same period.
The “dream ticket” says Bowler, would be to pick up clients in the £5m turnover upwards bracket. “We’re quite unusual in that we focus on a core group of clients,” he explains. “We are not turnover driven.”
One of the firm’s key specialisms is its comprehensive range of audit services, which includes financial outsourcing, IFRS, pensions and statutory audits. Bowler says the firm hears a lot of complaints from potential clients about how disruptive the audit process can be. As a consequence, the firm has made its audit process a lot more efficient.
“We separate our relationship partners from the business development team,” says Bowler. “That frees up our audit and relationship partners to spend more time with clients.”
However, it is the wealth management business, launched ten years ago that is proving to be surprising success story. Revenue grew by 30% on the previous year, while the wealth team was able to post an increase in new client wins of 545% in the first quarter.
Over the last five years, the wealth management business and service offering has evolved to meet the needs of high net worth individuals – a segment that has traditionally been under serviced by private banks and stockbrokers.
“Quite a key part of our service change was to extend the service to people who have been able to generate wealth,” says Bowler. “It’s really flying at the moment.”
PIC L-R: Ade Cheatham; Colin Shaw; and Jeremy Bowler
Cooper Parry: Vital Statistics
UK fee income 2012: £15.5m
% change on 2011: -1.8%
Operating profit: £5.3m
No of partners: 22
Fees per partner: £0.7m
Offices: Four – Derby, Nottingham, Leicester, London
Service lines: Audit, tax, corporate finance, transaction services, IT solutions, wealth, restructuring