Garrisons Accounting takes a $3.9m hit
THE Garrisons Accounting Group has taken a $3.9 million hit in its profit figures after the group decided to write down the carrying value of its accounting firms by $4 million.
The group, not related to Garrisons Financial Planning, made the write down despite generating $2.2 million before interest, tax, depreciation and amortisation, of which $1.9 million came from the accounting and financial services businesses within the accounting group, which made a pre-tax profit of $430,000.
Other gains came through the sale of the Corporate Services business, which made $160,000, but this was only small compared to the $4 million the group had agreed to write down based on the current performance of the practices compared with the expected performance.
The decision to write down the value of the five accounting firms in the group comes despite the fact they generated underlying revenue of $17.5 million for the six months to the end of December, an increase of $1 million over the same period last year.
However, Garrisons Accounting Group says while this growth has been solid, the earnings of the group were not consistent with levels expected from the revenue base of the groups.
The group has said each of the firms are stable and have strong revenue bases, and over time revenue figures should return to their expected potential.
AUTHOR
Jason Spits
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