PKF, Hall Chadwick reposition in WA
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SPECIAL REPORT: Accounting firms in WA, from mid-tier players to the 'big four', are positioning to benefit from stronger economic and commercial activity.
Accounting firms are somewhat of a barometer of the economy in which they operate.
Reflecting that, the past three to four years have generally been a challenging time for accounting firms in Western Australia; but there is notable optimism in the sector.
The goal for WA practices will be to match or exceed the growth achieved by their east coast counterparts.
Deloitte, for instance, has achieved national revenue growth of about 15 per cent in each of the past four years.
Each of these firms has battled to achieve the same growth in WA, and it has been a similar challenge for the mid-tier firms.
Against this backdrop, local firms have been positioning themselves for growth, most notably the two firms that previously were affiliated with the PKF network.
“That’s given us license to be the sole PKF representative in Perth,” he said.
“There was some confusion in the market, no doubt about it, when there were two brands in Perth.
“Now we’ve got the ability to market ourselves more clearly and align closer to the PKF brand.”
“There is absolute clarity now,” he said.
Mr Shillington is aiming to lift the firm’s market share, especially in the audit market, where its clients include several stockbroking firms and about 25 ASX-listed companies, and not for profits and family companies.
“We have a strong and robust reputation in the WA audit market,” he said.
“That’s the biggest area of growth we see.”
Mr Shillington sees the new branding as coinciding with an improved commercial outlook.
“The Perth market has been quite turbulent, economic conditions here haven’t been wonderful for the past four or five years,” he said.
“It has been a challenge, there is a lot of price competition out there and a lot of misinformation around audit scope and issues like that.”
Wayne Healy is also looking forward to better conditions after the rebranding of his Subiaco practice.
Hall Chadwick already had an insolvency practice in WA, which will continue to be led by partner Cameron Shaw and trade from its CBD office.
The Subiaco firm will continue to offer its accounting compliance services, as well as audit, tax, corporate finance and company secretarial services under its new brand.
“This is a very exciting event for both our firms, for our employees and our clients,” Mr Healy told Business News.
“Both teams have enjoyed significant growth in recent years and have a solid reputation for delivering accounting solutions to clients.”
Mr Healy said Hall Chadwick was a well-known and respected brand in WA, and one of the largest and most experienced accounting groups in the country.
Combined, the two Hall Chadwick offices will have 10 partners and 72 professional staff, making it the 10th largest accounting group in WA.
This reflects the different structure of the two firms, with Deloitte having more non-equity partners.
The expansion had been through organic growth and multiple acquisitions.
“The acquisitions mostly bring in new capabilities, it’s definitely not growth for growth’s sake,” Mr McNulty said.
He said the WA practice had achieved growth of about 6 per cent in the year to June 2018, which was still a pretty tough market.
“At the back end of the financial year we saw a lot more momentum, and our growth this financial year is well into double figures,” Mr McNulty said.
He said the WA growth had been led by the firm’s advisory practice, particularly consulting and digital and analytics
He added that the audit and tax practices in WA were also achieving double-digit growth this year.
“In Perth you can really see the pick-up in the economy, and its really exciting to be involved in a lot more transactions that weren’t around a year ago,” Ms Tremain told Business News.
Ms Tremain said the growth was coming from several different areas.
“We’ve had huge growth in our consulting practice, with lots of technology and cyber-related work, and we continue to be strong in health and there is more activity in our private client practice,” she said.
“Interestingly, with the tax office being so active in the market, that’s provided lots of need for our tax services as well.”
BDO’s Perth managing partner, Peter Toll, said the improvement in economic and commercial conditions in WA had already flowed through to his firm, after several challenging years.
“For the past 12 months, the year to June 30, we’ve seen good growth, just under 10 per cent,” he said.
“It’s mainly been driven by junior mining companies, capital raisings, floats and other corporate transactions.”
Mr Toll said M&A activity among private companies and the mining services sector had picked up this calendar year.
“That drives a lot of activity across the firm, whether it’s for individual clients, the corporate finance team, M&A, tax structuring, and audit down the track,” he said.
Mr Toll said his optimism was underpinned by stronger company valuations, especially in mining services, as well as generational change, as younger people looked to sell businesses they had inherited.
“The past 12 months have been good and we don’t see any reason why that won’t continue,” he said.
BDO had benefited from the extra depth and skills in its team after merging with Tomkins Turner Corporate Advisory at the start of 2018, Mr Toll said.
This contributed to growth in partner numbers over the past year from 19 to 25.
Looking ahead, he said the firm had potential to expand its business in a number of areas.
“We see that whole risk advisory, forensic, cyber area as a growth area of the firm,” Mr Toll said.
“We’re seeing lots of opportunities and actively looking to get more people on board to strengthen our capabilities in those areas.”
He said there was a limit on how much diversification BDO wanted to pursue. For instance, it had no plans to follow the ‘big four’ firms into legal services, preferring to partner with specialist law firms.
He added that BDO was striking a balance between its local ownership and being prt of a large global network.
For instance, Mr Toll said BDO globally had made a very big investment in audit software, which an independent local firm simply could not replicate.
“That said, you still want to keep your local touch,” he said.
“We are owners of the WA business and our key client base is WA owned and managed businesses.
“That gives us a connection to our client base and understanding this market.”