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July 31, 2008

New Grant Thornton UK chief aims to double revenue by 2013

By Nicholas Moody

Grant Thornton UK could double its fee income over the next five years, according to its new chief executive. Scott Barnes, who has been global head of specialist advisory services at Grant Thornton International since 2006, was elected to succeed Michael Cleary late last month. He will officially take over on 1 January 2009.


Scott Barnes, Grant Thornton
Scott Barnes, Grant Thornton

Grant Thornton has yet to release its 2008 financial results but Barnes confirmed the firm would generate more than £400 million ($778 million) in revenue. Doubling this to £800 million would help Grant Thornton close the gap on its larger rivals but the firm would still earn well below Ernst & Young, the smallest of the UK’s Big Four, which last year recorded £1.2 billion in fee income.

Barnes said the projected growth will come from developing international business, especially in India and China, and using the extra resources created through the firm’s merger with Robson Rhodes.

“[Growth will come from] developing, alongside our international partners, a truly international business that’s able to deal with the needs of all ranges of clients and getting benefit from the additional capacity we have created through the [Robson Rhodes] merger,” he said.

Grant Thornton merged with Robson Rhodes in July 2007, creating a £375 million entity and overtaking BDO Stoy Hayward as the UK’s fifth-largest professional services group in terms of revenue.

Barnes said the firm’s strategy for growing the business will remain focused on the upper mid-market using a sector led approach. “My watch-words are ‘clarity’ and ‘simplicity’, and often less is more in terms of making sure we do a few things well,” he said.

“We have got to be very clear about the markets we are playing in. That includes our core market, the upper mid-market, and then being clear about the niche markets we want to exploit – financial services, the Alternative Investment Market, recovery and reorganisation, forensic and going after audits in the FTSE 250 and 350.”

Barnes stressed that Grant Thornton’s market approach won’t be “indiscriminate” but focused on trying to achieve leadership in certain sectors. “It seems to me not credible for firms to say, ‘we are going to attack the FTSE 100’. Our approach is to go after a particular sector in the FTSE 100 or FTSE 250 and persuade companies that we are the best in that sector,” he said.

Global focus

The strength of the firm’s international network will become increasingly important in extending Grant Thornton’s domestic business, according to Barnes. “We live in a borderless business environment so wherever a local firm is based, whether it is the US, UK, France or Germany, they have to have an eye on what is happening globally. You can’t service your domestic clients and certainly can’t service international clients unless you have a very strong cohesive international network,” he said.

Despite the existing concerns about the health of the UK economy, Barnes said the firm’s current goal to post £500 million by 2010 was “absolutely achievable”. “I think the next 12 months are going to be difficult. I think if we invest in the right areas and we make sure that we are properly investing in those areas that flourish during a downturn then we can do it,” he said.

Nicholas MoodyNew BDO Stoy Hayward chief executive Simon Michaels is featured in ‘BDO leader promises fresh approach’.

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