A highly attractive boutique firm specialising in the servicing of business and HNW clients.
This established award winning firm has gone from strength to strength since its beginnings with fees now estimated at $3.2 Mill. It provides a full compliance service offering, including financial statements, tax returns, BAS, SMSF, ASIC registered office as well as business and tax advisory to business clients with revenue of $1 Mill to $50 Mill and HNW clients. It has excellent systems and processes for all client and people matters, focusing on high value clients to create positive outcomes which generates client fee growth and ongoing referrals. The firm is supported by a high quality, vibrant, professional team focused on values.
The firm has grown year on year for the past decade driven by word-of-mouth referrals from existing clients and other professionals due to its positive client servicing philosophy. As part of this, the firm has invested in technology and training systems for quality and efficiency. There would be considerable benefits from incorporating into a larger firm with more services to capitalise on a broader service offering to existing clients as well as meet the demand of many referrals for which the firm’s current capacity cannot service. Offshoring has yet to be utilised, which would improve profitability, and given the firm’s typical client size, there are many opportunities each year for special projects and additional services.
There were 298 client groups serviced in the 2023 FY, representing an average of just under $10.5K per annum. Some 42% of revenue is generated by clients with average annual fees greater than $30K with greater than 90% of revenue generated by clients with annual fees greater than $5K.The average client size is on track to grow to around $12K per group in the 2024 financial year.
For twelve months to March 2024, firm revenue was split across tax compliance and financial statements at 58%, 20% special projects, 7% activity statements, 4% year end tax planning, with the balance representing bookkeeping, payroll, company secretarial and disbursements.
The firm’s lodgements equated to 824 YTD March 2024 along with 100 BAS, 17 monthly IAS, 6 bookkeeping engagements and 420 corporate secretarial tasks. These lodgements are broken down across 359 ‘I’ returns, 18 partnerships, 228 trusts, 175 companies and 44 super funds. Overall, this represented an average billing of $2,341. Statutory and SMSF audits and valuations are outsourced to other firms.
The top 20 annual client groups to YTD March 2024 contributed almost 37% of overall revenue including the largest client at 3.4%. Most are located in and around the firm’s premises. The age of the main contacts within these groups range from their mid thirties to mid seventies, with an average age of 54 years. Industries vary although there is some leaning toward medical, product based businesses, HNW, investments and property development amongst these groups.
The firm’s partners are well supported by 10 professional staff and 6 support personnel with the majority of staff being full time.
The firm has an on premises server with new laptops and dual monitors per person. Utilised software is a mix of on premises and cloud based programs including Handisoft, BGL, Nimbus, MYOB, Xero and Office 365.
The firm’s main premises are well located with 260 m2 plus car parking and street signage. The area includes a large boardroom, kitchen, entertaining area, smaller meeting rooms and then an open plan space for personnel. The current lease concludes in February 2025 with a three year option, albeit the landlord is flexible to consider options or extensions. This space offers the opportunity for staff growth. The firm also operates a second satellite office in a strategic location, ideal for servicing and growing a local following.
The majority of partners wish to retire from technical tax work within the next two years but would be available for a transition or open to a part time ongoing BDM or advisory role. One of the partners wishes to remain with the practice longer term, although not necessarily in an equity position initially.
E-mail broking@robknightsbroking.com.au to request a confidentiality agreement or phone (02) 9233 4333.
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