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The partnership acquisition model of Sydney-headquartered accounting group Kelly Partners (ASX: KPG) has delivered a statutory net profit after tax (NPAT) of $13.5 million for FY24, representing growth of 23.9 per cent for the company whose share price has more than doubled since October 2023.
Kelly Partners listed on the ASX in mid-2017 with a market capitalisation in its prospectus of $45.3 million - a figure that has since ballooned to $370 million as the group has steadily grown its number of partnered offices, staff count and ultimately revenue.
This is all without issuing any shares since the initial public offering (IPO), although Kelly Partners has increased its debt to $45.2 million to help pay for its acquisitions.
The group added 18 partners in FY24, taking the total number to 96 as new offices were added in Australia and the United States, with the latter being a relatively new geography following its market entry in the first half of calendar 2023.
The fledgling US business started with a California practice bringing in up to US$1.7 million ($2.5 million) in annual revenue, but since then the US operations have grown to an annual revenue of at least $15.9 million following further expansion in California, a new Texas partnership in May, and a Florida partnership announced this month that also has a presence in North Carolina.
Kelly Partners' expected US revenue of $15.9-19.9 million would represent 12.2-15.2 per cent of the group's anticipated run rate revenue of $130 million for FY25, which if delivered would equate to a 20.2 per cent lift on the $108.1 million result for FY24.
The FY24 revenue itself is already a 29 per cent improvement, which gives a sense of how rapidly the company is growing and its board expectations for future performance.
"We continue to invest in order to deliver world class people, client and community impact. Our clients over the next 25 years are all going to have to earn a return on a global basis and will need their accountants to help them operate in this new global world," says Kelly Partners founder and CEO Brett Kelly.
The founder notes that the Australian business now has a revenue of more than $100 million, and the company is looking to expand its presence in not only the US but in the UK, where it sees significant opportunities as Australia's two largest expat communities.
"As such, we have invested heavily in our structure, our people, our brand and our digital infrastructure to facilitate this growth," he says.
"KPG aspires to continue to build its market leading programmatic acquisition business system in the accounting sector.
"This market position as ‘Australia’s global accounting firm for Private Business Owners’ will take effort to build out in the short term, investment in the medium term, and ultimately be a valuable differentiated market position over the long term that is inspiring to the talent we seek to attract, develop and have help us build the accounting firm of the future."
Kelly adds that since 2006 the company has used its 'Partner-Owner-Driver' model to complete more than 80 partnerships in total. The group also has partnerships in Hong Kong and India.
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