Grant Thornton Revenue Up 22%, Double the Big4 Rate

Grant Thornton LLP (GT), the U.S. member firm of Grant Thornton International, says that its US revenues climbed 22% from $726 million to $886 million in the fiscal year ending July 31, 2006. This follows a 29% increase from $562 million in 2004 to $726 million in 2005.

GT has a full 10% higher than the annual sales increase of Deloitte and Touche LLP (12.5%) and Ernst and Young LLP (10%). In 2005, GT ranked 7 out of 100 in Accounting Today's list of Top 100 firms.

The firm also landed 3,400 projects and 200 new clients in addition to starting a new Recovery and Reorganization practice, a Healthcare practice and acquiring Stout Risius Ross Inc. of Farmington Hills, MI. The client base grew from 1,800 to 2,000, so the volume contributed by new clients is approximately 11% of the 22% sales growth, the balance 11% is likely additional services provided to existing clients.

Surprisingly, GT provided NO further financial details on its release, but highlighted some qualitative achievements. We understand that accounting partnerships are by nature quite tight lipped and reluctant to provide any information beyond the bare minimum. DT and EY at least told us where the overall growth was along service lines, practices and geographies. But this total lack of detail does not allow for any comparison with other firms on any dimensions.

All we can say is that GT grew much faster than its larger competitors, which indicates that they are getting proportionately a lot more business this year than the Big4. The gap between GT and the smallest of the Big4 is billions of dollars, so there is no impending threat for the mega firms. But, GT is clearly capitalizing on opportunities that the Big 4 are either not seeing or do not prefer to see. Companies are slowly widening their horizons beyond the Big Four and the large number of new clients which GT has acquired is indicative of this trend. Two years of 20% + growth are catapulting this mid-level firm with revenues of ~$500 million very rapidly to a ~$1 billion dollar regional powerhouse in 2007 if current trends continue.

Some notable achievements....

SEC proposed Section 404 changes --GT believes that these provisions should be given a chance to work through collaborative fine-tuning. In the process of "getting it right," it is vital to make sure that new guidelines protect investors without unduly burdening companies with excessive costs.

Increased transparency in reporting auditor change -- GT urged the SEC to revise 8-K rules to require reasons for all company dismissals of auditors, for all auditor resignations and for all instances in which the auditor chooses not to stand for reappointment.

Section 199 -- GT submitted comments to the United States Treasury Department and the Internal Revenue Service on the Section 199 Proposed Regulations.

Working Mother 100 Best Company -- The 100 Best recognizes Grant Thornton for creating a corporate culture that encourages the retention and advancement of women.

BusinessWeek 50 Best Places to Launch a Career -- GT landed the No. 34 spot

IDG's Computerworld -- Named Grant Thornton LLP as the No.5 Best Place to Work in Information Technology.

Etc. Etc.