Grant Thornton boasts its fifth strong year but CEO Scott Barnes isn’t bragging

Grant Thornton’s chief executive Scott Barnes is not a man given to extravagant outbursts.

 

Today, the financial adviser’s yearly report boasts of “a fifth successive year of strong results”, with revenue breaking through the £500m mark it had targeted for next year.

 

As Barnes took over as boss six years ago, that consecutive growth, over the course of a recession, must be quite gratifying?

 

“Yes, I’m quite pleased about that,” he says modestly. “The first year we did a lot of restructuring, but since then we’ve been growing our profitability.”

 

Barnes, a 58-year-old Yorkshireman who has now been with Grant Thornton 30 years, isn’t crowing, though the figures for the mid-market business specialist suggest he must be doing something right.

 

“There’s been an improvement in the economy which we’ve seen in the last year particularly in our regional practices,” he says.

 

“There’s been a significant improvement in advisory, where there’s been about 15 per cent growth. The other area where we grew was in public sector advisory.”

 

Headline figures were a nine per cent rise in revenue to £512m for the year ending 30 June, with profits up 7.7 per cent. The average like-for-like profit per partner rose 15 per cent to £402,000, with distributable profit per partner up 10 per cent to £385,000, after changes to tax on employee service companies.

 

Pointedly, the report also lists how much Grant Thornton paid in tax – £169.4m, with an average rate of 42.5 per cent per partner.

 

Which begs the question, does the firm encourage its clients to be so virtuous? Or is it, as EY’s Steve Varley last week claimed, up to government to legislate to stop firms such as Google and Apple scrimping on their tax bill.

 

“My view is that it is incumbent on everybody in the debate to recognise the issues,” says Barnes.

 

“So we’ve been very clear in terms of putting a statement out on our intranet about our principles for tax advice. It basically says that we are providing advice to clients, but it’s up to clients to make their own decisions about what they do. 

 

“We will always be transparent with HMRC and we will always advise our clients, not just on the letter of the law, but on the underlying spirit of the tax legislation. 

 

“I’ve got some sympathy with the views expressed by Steve Varley though. Ultimately tax legislation is ruled by government, but I think it’s a much bigger issue. I think it’s an international issue. I don’t think you can regulate tax policy on a national basis. All countries say that they want to have a business-friendly tax environment. They want businesses to be comfortable here, but on the other hand…”

 

Barnes says Grant Thornton, the fifth-biggest UK accountant, has picked up two or three larger clients in the past year – Interserve, Simply Health and Fullers – but is not a stalking horse for the Big Four.

 

“Our key purpose is in the middle market. We see ourselves as a mid-market player representing mid-sized businesses. We will play in the larger corporate  arena only where we think we have the expertise.”

 

And it is on this topic that Barnes shows most passion.

 

“For the last two or three years we’ve been trying to speak up for mid-sized businesses and identify them as a key part of the industry that can drive growth for the UK economy,” he says.

 

“If you look at all the stats relating to mid-sized businesses, they tend to be more productive, they grow more quickly. We’ve been trying to encourage politicians and policymakers to think about businesses in the mittelstand – which is this German idea of medium-sized businesses which are driving economic growth.”

 

Barnes’ CV lists his other great loves as cinema, theatre, cricket, football and selecting, preparing and consuming good food and wine.

 

“My wife is also from Yorkshire and we like to do a lot of socialising. We are pretty good cooks,” he says.

 

Given Barnes’ habit of understatement, that probably puts them in the Masterchef league.

 

■ Revenue growth of nine per cent, rising to £512m in the 2014 financial year

 

■ Profits up 7.7 per cent in absolute terms and profit per partner up 15 per cent on a like-for-like basis

 

■ Hired 42 new partners, 276 new trainees and 116 paid interns hub in Manchester and expansion in Belfast.

 

■ Scott Barnes is married with two “grown up” children and lives in Hertfordshire. 

 

■ He is a lifelong Huddersfield Town fan

 

■ His favourite restaurant is The Orrery on Marylebone High Street, and favourite food and wine suppliers are Borough Market and The Wine Society.