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New Grant Thornton CEO Greg Keith has promised significant investment in key areas after the firm recorded 1.3 per cent growth in revenue for FY2015.
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GT flags investment after ‘marginal’ growth
29 July 2015
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AccountantsDaily can reveal the firm's total revenue for the 2015 financial year was $221.9 million, up just 1.3 per cent from $219.1 million (adjusted) the previous year. Revenue per partner was up 2.4 per cent, while the firm also saw a 1 per cent increase in profit.
Looking ahead, the firm is forecasting revenue growth of 3 per cent for the 2016 financial year.
Mr Keith said he expects this much stronger growth to come from strategic investments the firm has already made, and those it will continue to make.
“We see that the growth is going to come from our investment in Asia and technology,” he said.
“We have seen a relatively flat market in the core businesses of audit, tax and accounting and we really see the need for further investment in Asia, technology, leadership and development and stakeholder relations.
“That’s where we believe the market is going to show greater growth. We also see there is a need, moving forward, to invest in technology for us, not just for the clients.”
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Aside from this, Mr Keith said the firm is looking to grow its presence across Australia through strategic acquisitions.
“Our intention is to continue to grow, not only organically but through M&A and we are particularly focusing on the area of growth solutions,” he said.
“Geographically, we are always looking at areas to grow, but particularly in Brisbane, Adelaide and Perth. We are actively in the market seeing what’s available.”
Meanwhile, shrinking margins – caused by a reluctance to pass on cost increases to clients – is also likely to lead Grant Thornton to offshore some work, Mr Keith said.
“We currently do everything in-house and a number of our competitors are already utilising global resources in a manner that allows them to maximise margin without increasing prices.”
Mr Keith said the Australian firm is already in discussions with Grant Thornton India to put in place an appropriate offshoring operation, in which the Australian firm can retain a high level of control but take advantage of lower costs.
“That allows you to compete on price with competitors, otherwise we are going to see increases in costs around employment and rental costs,” he said. “But we are unlikely to see an increase in charge rates.”
Grant Thornton’s future growth is all the more important as the firm is marketing itself as a leader in growth advisory for medium-sized business.
“We are putting a flag in the ground saying we are focusing on mid-sized business and we are focusing on growth,” Mr Keith said.
“It’s quite a direct focus so we can be a market leader, rather than just being known as the alternative to the big four, or the fifth firm.
“We see ourselves as being the market leading in that space.”
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