Pannell's managing partner swipes at mega-mergers as firm's results disappoint. John Stokdyk reports.
Pannell Kerr Forster managing partner John Wosner hit out at Big Six mergers in his farewell financial statement, following virtually flat results for 1997 released yesterday.
Wosner will step down and be replaced on 1 February by London managing partner Martin Goodchild.
Citing the likely loss of objectivity within the proposed Big Four, Wosner, who will resume his tax partner duties, said: ‘Services provided by the new giant firms will be incompatible with personal service and independent financial advice.
This means that there is a unique opportunity for firms such as PKF to fill this gap.’
Such a boost would be welcome at PKF. The partnership’s 1997 accounts showed a tiny #37,000 increase in profits to #15.7m on fee income, down from #73.8m in 1996 to #72.7m last year.
Thanks to a reduction in the number of partners, from 145 to 140, equity partners’ earnings rose to #112,000 from #108,000 last year.
Following a big leap in 1995 and the loss of a major audit client in 1996, Wosner said: ‘The results were bound not to be as good this year, but many offices experienced improved margins and profits this year.’
Bright spots included increases of 15% in corporate finance activity, 20% in property-related fees, and 7% in corporate recovery and insolvency fee income. But even these growth rates lagged behind those of the Big Six.
Although Wosner criticised the giants’ merger proposals, he confirmed PKF had talked to Group A rivals, including Kidsons Impey and, two years ago, Clark Whitehill. ‘There are only a few firms in our market and we regularly talk with competitors to compare our position and the possible benefits of mergers,’ he said, but stressed ‘nothing is imminent’.
Goodchild has been closely involved in the firm’s integration strategy, which saw the London, Leeds and Manchester offices merge last year. His appointment, said Wosner, ‘will accelerate that process’.