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October 17, 2010

Grant Thornton revenue flat, partner profits up

Grant Thornton UK has reported flat revenue although its pre-tax profit has increased 40 percent due to efficiency gains from the Robson Rhodes merger and cost-cutting. The firm reported revenue of £379.7 million, an increase of 0.4 percent, while the firm’s profit increased 40 percent to £77.6 million.

Advisory revenue grew by 11.1 percent to £151.2 million, but assurance revenue dropped by 6.2 percent to £135.5 million and tax slumped 4.8 percent to £93 million.

Although revenue growth was modest, Grant Thornton has been able to increase partner profits by 60 percent to an average of £321,000 by cutting costs at the firm.

In late 2008, the firm said it would be shed 225 jobs, about 5 percent of its workforce, and in that financial year the firm’s partnership decreased by 17 percent. Some of these cuts were a result of the firm’s 2007 merger with Robson Rhodes while other cuts were made due to the recession.

“Unsurprisingly, revenue for core service lines other than risk and recovery did shrink last year, however performance improved in the second half of the year and I expect that to continue,” Grant Thornton chief executive Scott Barnes said. 

“There is evidence of a recovery in corporate finance work with growing activity from private equity houses and businesses able to take advantage of sellers becoming more realistic over valuations.”

Barnes said the coming 12 months will be difficult for professional services firms and acquisitions would form a key element of the firm’s strategy for growth.

This week, Grant Thornton completed the acquisition of litigation support and ediscovery consultancy Legal Inc, which has been integrated into the firm’s forensic practice.

 

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