BHP merger with Clough ‘to create Yorkshire accounting powerhouse’

John Warner and Nigel Bullas, managing partners at BHP and Clough & Company respectivelyJohn Warner and Nigel Bullas, managing partners at BHP and Clough & Company respectively
John Warner and Nigel Bullas, managing partners at BHP and Clough & Company respectively
YORKSHIRE’S LARGEST independent accountancy firm has completed its biggest deal to date with a transformational merger to strengthen its position in the increasingly competitive market for professional services.

BHP is joining forces with Cleckheaton-based Clough & Company to create “a regional accounting powerhouse” with six offices, more than 270 staff and revenues approaching £18m.

The landmark deal, which will place BHP within the top 40 largest accounting firms in the UK, is the latest in a wave of white collar mergers.

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Mid-tier rival BDO yesterday confirmed it was planning to close its Sheffield operation and relocate the office to Leeds and Nottingham, highlighting the ongoing consolidation.

Big Four firms such as KPMG and PwC are expanding into the SME market place with cloud-based accounting services.

John Warner, managing partner at BHP, told The Yorkshire Post that the rationale behind the deal was to strengthen the firm’s position across the wider region.

The 140-year-old business has offices in Sheffield, Leeds, Chesterfield, York and Harrogate.

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He said: “We moved into Leeds with the Mitchells merger four years ago and that’s grown quickly and has had to move into new premises.

“We wanted to add to that West Yorkshire offering because we think that’s a big and important market.”

He said BHP’s growth has been driven by adding to specialist services in areas like corporate finance and tax planning to keep abreast of client demand among growing SMEs.

Mr Warner said Clough & Company also wanted to add to its specialisms and tap into Kreston, the international network of independent accounting firms of which BHP is a member.

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He is predicting more mergers in the accountancy market over the next two or three years, echoing the consolidation in the legal sector.

Naylor Wintersgill merged with local rival Auker Rhodes Accounting last month to create the largest firm in Bradford. This was followed by Watson Buckle’s merger with Paul T Spivey of Shipley earlier this month.

Mr Warner said two factors are driving consolidation: baby boomers are coming to retirement age without having succession plans in place and the needs of business are becoming more complex.

He explained: “They are needing more of an advisory partner than a compliance partner. The improvement in technology and the advent of cloud-based accounting systems is changing what’s required from your accountant.

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“That is why we want to add to our specialisms and niches - to differentiate ourselves.”

Legal reforms mean that annual tax returns can now be pre-filled, reducing the need for traditional high street bookkeeping services.

Mr Warner said KPMG and PwC are trying to widen their appeal to SMEs by introducing cloud-based accounting software.

He said: “I think the personal service that we can offer is still very important and we have to become more advisory and add value to our relationships.”

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At the top end of the accountancy market, Mr Warner claimed that the Big Four have “almost an oligopoly” and remain dominant in spite of efforts by Grant Thornton and BDO to up their game.

BDO said it is consulting with staff about the Sheffield office and remains committed to its national network of offices.

The Clough & Company office at Cleckheaton will be branded as BHP Clough & Company.