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Crowe Horwath has announced its 2013/2014 results, declaring a sharp decline in revenue and a subsequent hit to profits.
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Crowe Horwath profits drop
16 September 2014
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The firm said normalised EBITA for the year was $16.3 million, down from $26.5 million in in 2012/2013. This was in line with guidance released by Crowe Horwath in May.
The firm also announced a net loss after tax of $88.2 million, however, this included a non-cash goodwill impairment charge of $90.7 million.
A statement by Crowe Horwath regarding the write-down said, “The directors considered it appropriate to book a non-cash impairment charge of $90.7 million, in recognition of the time required to rebuild earnings and lower recent share price”.
NPAT adjusted for the write-down was $2.5 million, down $5 million on 2012/2013.
Chief executive Chris Price told AccountantsDaily that the subdued results were down to the firm's “stabilise and grow” strategy which he himself put in place. He said this strategy has been designed to facilitate consistent growth for the firm in the future.
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“I’ve been seeking to stabilise the business and give a platform for growth and I feel we are starting to do that,” he said.
“I think we’ve stabilised the principal group and made some changes in the business to simplify the structure.”
“I've just tried to simplify the operating structure to an extent and give greater decision-making ownership back to our firms,” he said.
Mr Price also blamed tough business conditions in many regional areas where Crowe Horwarth is a major player, for the drop in revenue. Mr Price said the firm had not lost clients but had won less advisory work from existing clients as business conditions deteriorated.
Looking forward, Mr Price was upbeat about Crowe Horwath’s position.
“I feel that the year has started off relatively well so we are encouraged by that – we had a bit more deal flow through advisory towards the end of last year,” he said.
“It’s been a tough few years but we are quietly confident about the look-forward position,” Mr Price said.
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