Fee income earned by the Big Five firms smashed through the £4bn barrier for the first time this year, as they and mid-tier firms continued to squeeze smaller practices, according to this year’s Accountancy Age Top 50.
Performance among the top firms showed little impact from any wider economic slowdown over the last 12 months. The Big Five’s fee income reached £4.12bn in total (up from £3.73bn last year) as the average income rise hit 20.9% compared to 15.3% in 1998. Total fee income at mid-tier firms leaped from £901.73m in 1998 to £1,006.74m this year as average rises reached 13.7%.
Firms benefiting from the rampant merger activity over the past 12 months included BDO Stoy Hayward, which toppled Grant Thornton from its position as sixth UK firm, HLB Kidsons, Smith & Williamson Group and Mazars Neville Russell.
But other firms reported strong organic growth. Clive Parritt, chairman of Baker Tilly, put the firm’s 20% increase in fee income down to its management policy. ‘Our growth has been pretty consistent and it shows that the investments we made in the bad times are beginning to show a return now,’ he said.
Other firms, including Kingston Smith and Saffery Champness, said that careful recruitment at senior levels had contributed to their success.
Both the mid-tier and Big Five groups grew at the expense of smaller firms listed in the 1999 Accountancy Age Top 50. Practices placed 31 to 50 grew an average of 11.2% compared to 10.7% last year.
Accountancy giant PricewaterhouseCoopers inevitably retained its lead with a UK fee income of almost £1.6bn, almost twice that of nearest rival KPMG, which posted a £867m income. Deloitte & Touche reported the biggest percentage growth in fee income – with 27%.
The year has been a runaway success for management consultancy particularly for the Big Five.
Deloittes managed to increase its consultancy income by 60% on last year and PwC by 51%, although these figures reflect consultancy growth across Europe, the Middle East and Asia.
Full Top 50, page 20.
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