Turnaround and business advisory firm Baker Tilly has confirmed a 112% rise in pre-tax profits following its acquisition of RSM Tenon last year.
The firm, which now operates Newcastle and Sunderland offices, saw consolidated pre-tax profits rise to £11.9m and turnover rise by 47% to £245m.
In publishing its results for the year ended March 31, 2014, Baker Tilly confirmed a £32m loan it had taken out to finance the acquisition of RSM Tenon was fully repaid.
During the period Baker Tilly also disposed of the financial advice arm of RSM Tenon, which it acquired as part of the September 2013 takeover. The £25m sale to London-based Towry saw the move of some 4,500 clients and the majority of the arm’s staff.
At the time of the sale, Baker Tilly managing director Laurence Longe indicated the division was not a good fit for the newly merged firm.
Restructuring following the merger reduced the firm’s workforce by 600 – in turn reducing the group’s annualised salary cost by £17m.
Baker Tilly also confirmed it was now actively recruiting “high-calibre” partners and other staff around the country.
Mr Longe said: “This has been a transformational year for the group which has seen a full integration take place within a year of our acquisition of Tenon in September 2013.
“This achievement was only made possible by the huge contribution and commitment shown by partners and staff from both firms who largely succeeded in providing a ‘business as usual’ environment for our clients whilst a full merger and integration process was underway.
“Although the financial performance of a professional services firm in the year following any major merger or acquisition can often be a challenge, it is certainly pleasing to note that both consolidated profits and partner profits rose by significant amounts.
“Also pleasing is the fact that since the year-end, we have fully repaid the long term loan of £32m taken on to finance the Tenon acquisition.
“This was largely made possible by the sale of the financial management businesses acquired in the Tenon transaction which were not considered to be core to our long-term strategy and we have now returned to a net cash position.”
Revenues across the Restructuring and Recovery business increased by 14% to £27m during the year, while revenues in the Corporate Finance division grew by 35% to £16m.
Mr Longe added: “‘The outlook for the current year looks promising, with group results on budget for the first eight months and signs of growth throughout our service lines. Our strategy of growing the business profitably is at the core of this and a greater emphasis on advisory services is a strategy that is being actively pursued.
“Nearly 80% of our revenues are considered recurring from our current client base and, while this provides inherent stability, it also provides an ideal platform from which to grow new advisory service lines to meet ever changing client needs.”