An ideal opportunity for a purchaser seeking a bolt on of fees.
This long standing lower North Shore firm, with billings circa $570K for FY 2018, provides broad ranging accounting, tax and audit services to its client base, which is well spread throughout Sydney. The expansion of advice in the SMSF and financial planning arenas represents a growth opportunity.
Key sources of revenue are I returns (15%), companies (37%), super funds (16%) and statutory audits (19%). Specific fees per return type are comparable with market given the firm’s size with an overall average tax lodgement size of around $2,100 per return.
Tax and accounting clients are typically middle aged or older, whilst audits are generally small in nature and relate to clubs, super funds and/or trading companies. With an average client size of approximately $2.6K, a good proportion of the firm’s revenue is generated from annual fees in the range of $3K – $10K, whilst the firm’s two largest clients contribute around $100K or approximately 18% of fees.
The firm’s largest client equated to just over $68K in fees in FY 2018, which was a combination of accounting, tax and audit services. The top 20 client groups are responsible for slightly more than half the firm’s annual revenue, most of whom have been serviced by the firm for 15, 20 or 30 years. The age of the main contacts within these larger groups range from their late thirties to mid-seventies.
Retirement is driving this proposed transaction, although the vendor is available to assist with an appropriate transition. However, the purchaser must have RCA’s in-house to ensure the continued servicing of these audit clients. It is anticipated that the purchaser will relocate the acquisition shortly after finalising the transaction within the CBD / North Sydney / Crows Nest areas.
E-mail broking@robknightsbroking.com.au to request a confidentiality agreement or phone (02) 9233 4333.
The completion of a confidentiality agreement is essential prior to the supply of any information.
