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Number of the Day: £518,000

That is the average profit per partner before tax at BDO U.K. in the 2020 financial year that ended June 30, down 14% from the £602,000 in profits each partner took home the previous year, according to the Financial Times and The Telegraph.

Overall, the Queen’s BDO had revenue of £660 million for 2020, up 14% from 2019, mostly due to the positive aftereffects of the firm’s acquisition of Moore Stephens in early 2019. BUT, as FT reported …

Full-year underlying profit — with the merger benefits stripped out — fell £25m from the previous year.

FT also mentioned how the pandemic really messed with the firm’s financial results in 2020:

The UK’s fifth-largest accounting firm by revenue said that pre-tax profits in the year to June 30 were flat at £137m, as the chilling effect of the Covid-19 crisis overshadowed the benefits of its acquisition of smaller rival Moore Stephens.

Managing partner Paul Eagland said the eruption of the crisis in March suddenly reversed the growth the firm had been enjoying.

“For the first nine months pre-Covid, revenues — including the merger — were increasing at a rate of 24 per cent,” said Mr Eagland.

“We were absolutely flying like many parts of economy . . . then the moment the pandemic hit, revenues dropped by 13 per cent and that’s when you get the profit hit. People lost confidence and stopped buying services while they tried to deal with their businesses,” he added.

A decision to preserve jobs and not cut costs in line with the drop in revenues, which fell 13 per cent between April and June, meant that profits were hit.

BDO furloughed 700 employees—an eighth of its U.K. workforce—at the start of the pandemic; however, those BDOers are now back at work and receiving full pay, according to The Telegraph.

But a 25% cut to partners’ monthly pay is still in place and quarterly profit distributions remain frozen.

BDO partners’ pay falls as Covid-19 chills business [Financial Times]
BDO refuses to repay furlough cash despite partners earning more than half a million [The Telegraph]