In a year of “fantastic” growth, the network has plugged representation gaps in Latin America and Europe. The network has added eight member firms this year, although Wolfgang said global revenue growth will not reach the 20 percent mark he had previously predicted due to a slowdown in the US market.
“I thought we were going to look at a 10 to 12 percent increase in the US but I don’t think we will see those [targets] in 2008. We are not operating to that level in the plan right now and I think that has a very major impact on [global revenue growth],” he said.
“I think organically we are not going to see that much. If we were to see a 6 to 8 percent growth, I think that is reasonable for 2008 financial year end,” he added. If UHY achieves 8 percent growth its global combined revenues will rise to $658.8 million in the year ended December 2008.
Although this is not substantial growth, the network has managed to grow its membership geographically, opening new revenue streams and building a stronger network. “We have had some key areas that we needed to add firms. One was Ireland, a very prominent place we needed to have our presence returned. Kazakhstan is another country, a little unusual, but it is moving further into Eastern Europe,” Wolfgang explained. “We have added two more firms in the Ukraine, we are just finishing up membership criteria on one of these now.”
UHY also recently added a sizable firm in Nigeria called Maaji & Co, with 68 professionals in Abuja, Benina, Kaduna, Hano, Lagos, Lokoja, Maiduguri, Port Harcourt and Yola. Across the Atlantic, the network has been recruiting heavily in Latin and South America. In Brazil, the network recently added a firm with 65 to 70 people. There have also been additions in Puerto Rico and Guatemala. The Guatemala firm, UHY Pérez & Co, is a seven partner firm with 30 staff in Guatemala City.
“We have a good strength now in our entire Latin and South America region, which has been something we have been working very hard on,” Wolfgang said. “In that region, we have some target markets that we are still looking at. Panama, Costa Rica and Bolivia are our three priorities, along with our on-going Caribbean venture in terms of trying to increase our exposure there. Puerto Rico is a key component and we are looking at Jamaica, the Cayman Islands and there are another couple of islands as well.”
Wolfgang explained that due to a shortage of firms it is difficult for UHY to gain exclusivity in the Caribbean. The network normally has a policy of one firm per country but firms in the Caribbean are usually tied up in multiple relationships. Wolfgang said although UHY has correspondent capabilities in the Caribbean, full membership is proving more difficult.
The largest market UHY will focus on in the coming year is Japan. Wolfgang explained that it is has been extremely difficult to build a relationship with a Japanese firm.
“My sense of it is that there is an independence issue in Japan,” he said. “They just don’t see the need or desire to link up internationally. I think it is because a lot of the firms there are smaller, one or two partner firms. We do have a couple of relationships where if we do need some work done we have a couple of folks that would do it, but it’s more on an informal basis.”
In Southeast Asia the network recently expanded its Malaysian capabilities and hopes to secure a member firm in the Philippines by October. UHY is also investigating options in Thailand and Cambodia.
Elsewhere in Asia, UHY is ploughing the subcontinent to shore up its representation in southern India.
“We started discussions at a meeting [with UHY’s Indian firm Chandabhoy & Jassoobhoy] in June about how to do that,” Wolfgang said.
“They only have a couple of offices [in Mumbai and New Delhi] and we want to go further south. We originally thought [they] were going to move into the south more aggressively but they have decided not to do that at this point. So we may look for a relationship that covers the southern part of India. We might add another firm in that part of the country with the full knowledge of [Chandabhoy & Jassoobhoy].”