Scots accountancy giant reports rise in profits to nearly £16m
By Scott Wright
JOHNSTON Carmichael has hiked profits amid “heightened” demand for its services and measures to save costs during its most recent financial year.
The independent accounting firm, which operates from 13 offices across Scotland and one in London, made a pre-tax profit of £15.8 million in the year ended May 31, a period overshadowed by the pandemic. The firm had made a profit of £12.4m the year before, when results were also “adversely impacted by the coronavirus pandemic”.
Writing in new accounts at Companies House, members at Johnston Carmichael flag “heightened” demand across service lines which helped drive profits during the year, alongside efforts to control overheads.
Bosses state that financial resilience had been of “paramount importance” amid the pandemic, and outlined measures taken to protect cash. It ended the year with net assets of £19.8m at year-end, up from £13.8m the previous time.
“Partner drawings were reduced, pay-outs and dividends were curtailed and post year-end there was a capital call on the partners of £0.75m to further enhance the group’s financial resilience,” the accounts state. “Operational resilience has been another key area of focus, with digitisation and process standardisation at the heart of this. Finally, and perhaps most importantly, the personal resilience of all our employees and partners has been drawn on like never before and has played a significant role in the group being able to deliver for clients and produce these results during the most challenging of periods.”
Turnover generated by the firm increased by 6.2 per cent to £54.6m, boosted by demand across its service lines, from deal activity to people and business owners putting their affairs in order as the pandemic took effect. Growing activity was seen in sectors such as food and drink, financial services, technology, infrastructure, and energy.
Ongoing government support, such as the furlough scheme, meant there was not a spike in demand from clients for insolvency services.
Johnston Carmichael itself received £535,000 over the period under the UK Government furlough scheme, compared with £606,000 the prior year.
The accounts show that the firm had an average of 713 people on the payroll during the period covered by the accounts, down from 768 the year before, while the overall wage bill went up to £29.3m from £27.6m. The number of profit-sharing members at the firm was unchanged at 62, with the amount of profit attributable to the member with the largest entitlement increasing to £719,000 from £485,000.
Chief executive Andrew Walker said: “It has been an extraordinary year and like our clients we have faced challenges brought about by the pandemic, but I am extremely proud of the way our business has gone above and beyond to deliver high quality work, adding value for our clients as they navigate the economic recovery. Being recognised as trusted advisers is only possible due to the drive and determination of our exceptional people. We are a people business. Having the right people and skills is crucial to our future success, but importantly it also creates opportunity.”
Mr Walker added: “As restrictions lift and the economy moves forward our growth has accelerated across a number of areas of our business with particularly strong growth from audit, tax, and advisory services.
“However, there are uncertainties such as inflationary pressures which have been exacerbated by the concerning developments in Ukraine.”
The firm said it promoted 60 people across the firm last year.
and hired 100 students – a record number for the business.
"We will continue to invest in learning and development to ensure our people and partners are the best they can be," Mr Walker said.
Johnston Carmichael said it now operates a hybrid working model, meaning employees can decide how often they need to be in the office, based on business needs