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Block Spent $12M Buying Tax Firms

Greg Macfarlane, H&R Block H&R Block has spent about $12 million in acquisitions that primarily include independent tax preparation firms during fiscal 2015. That is in addition to the $100 million spent to acquire 351 franchised Block locations as part of a plan to pick up 650 offices sold to franchisees in the last few years. The numbers were outlined during a recent webcast for financial results for the third quarter ended January 31.

There were no other details announced about the purchase of tax firms. The company said it December it was looking for high-quality businesses that prepare at least 100 returns annually. Block is  buying franchised stores primarily in urban areas.

"Going forward, we will continue to evaluate potential franchise buybacks and independent targets." CFO Greg Macfarlane said in prepared remarks. "However, we do not expect the overall mix of company-run versus franchise locations to change materially."

This year's results include 10 days in which the Internal Revenue Service was accepting returns during this year's tax season as opposed to only one day in the year earlier quarter when the start of tax season was delayed. The company lost slightly less than $37 million in the most recently ended quarter, a sharp improvement from a loss of $214.7 million a year earlier. Third-quarter revenue was slight higher than $509 million, more than double the $199.8 million a year ago.

Block and its stores had prepared 4.5 percent fewer returns in the tax season through February 28, compared to the same period through February 27 in last year's tax season. However, it says is bringing in more revenue and attributes part of the fall off to its decision not to offer free Form 1040EZs during the current tax season

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