Simon Michaels is confident of long-term goals despite seeing profits fall 12%
BDO WILL CONTINUE to invest and position itself for the long term, even if that affects short-term profits, according to its managing partner Simon Michaels (pictured).
Announcing a 12% dip in profits for the year ending 29 June 2012, to £51.2m, and with its merger process with PKF likely to kick off by March 2013, the firm will not take short-term decisions to boost profits.
Speaking to Accountancy Age, Michaels believes the firm has become more attractive through its investment in key client areas, such as financial services audit and forensic accounting. Its merger announcement has also driven both partners and anon-partners to enquire about joining the business.
“There are opportunities to grow in specialist areas and invest in them for long-term profits. People are looking to join us as they see us investing and going places. I don’t think we’ll have an issue retaining and winning talent,” he said.
“We don’t make as much as the Big Four, but people can be themselves with us, and work with ambitious entrepreneurs.”
However, he admitted that investing while integrating with PKF would be a “fair challenge”. Communication about the firm’s strategy would take place upon completion of the deal – likely to be in March.
Its 2011/12 fee income was static, at £283m. Audit income climbed 5% to £96m, while tax suffered due to a lack of corporate transactions, down 2.9% to £80m.
A lack of transactional work also hit its advisory division – fee income down 4.5% to £107.1m.
Michaels warned that tough market conditions would see continued pressure on driving down compliance-related fees, “which will stay around for some time”.