BDO’s network has reported a total combined fee income for the year ended 30 September 2014 of $7.02bn (£4.47bn), an 8.81% increase year on year driven by its ongoing merger programme, organic growth and new firms joining to bring the total to 110 member firms
The network’s service line fee splits remain similar to previous years, with a slight decrease in audit and accounting to 57.5% (from 59.3% in 2013) and a similar increase in the advisory stream’s revenues, which at 21.9% overtook the tax stream’s percentage of 20.6% (20.1% in 2013).
There have been 28 mergers over the past 12 months, with BDO Canada alone undertaking six mergers, and BDO says it expects to remain active on the merger front into 2015 and beyond.
Martin van Roekel, global CEO of BDO said the network was following a policy of expansion and predicted that by 2018 'only two or three substantial mid-tier networks with a global presence will be left standing'.
The US and China firms performed particularly well, with US revenue up 22% at $833m (£530m), split equally between organic growth and the firm’s expansion strategy which saw it make four acquisitions. Revenue in China grew 16% and the firm undertook four mergers.
Van Roekel said: ‘The large firm accounting market has been consolidating for some years, driven by the requirements of midsize and large global clients. The mid-tier of our profession is now on a parallel path, as smaller networks and firms seek to meet the increasingly international needs of mid-market companies pursuing growth markets. Such businesses are not always best served by the biggest networks, which focus on the very largest companies.
‘At BDO, we are actively increasing our presence in the US – a “re-emerging” economy – and also in the emerging markets that we know are central to our clients’ growth strategies. China is a prime example: the switch to a service-led economy provides real opportunity and we are already bigger here than EY and KPMG.’
BDO has 1,328 offices and just under 60,000 partners and staff worldwide, including its exclusive alliances.
New firms joined the network in the last year including Fiji, Réunion Island, Bangladesh, Papua New Guinea and Sierra Leone, and a number of firms enlarged their territories, adding Laos (Malaysia), Afghanistan (Pakistan) and the Maldives (Sri Lanka).
The results follow on from positive growth at BDO UK which recently reported 7% organic growth in revenue in the UK. It performed well following completion of the merger with PKF, which is now being reflected in their annual results. BDO UK reported total fee income of £384m for the financial year ended 4 July 2014, up from £312m for the previous year.
