The biggest U. S. tax preparer H&R Block Inc. will continue as an independent company. It will intensify efforts to win customers for digital filings amid escalating competition, Chief Executive Officer Alan Bennett said.
H&R Block has reported a fall in annual revenue in the last two years. It has been losing market share to its rival TurboTax-owner Intuit Inc.’s Web-based software. There is a rising apprehension that retail tax preparers are in “secular decline,” Bill Carcache, an analyst with Macquarie (USA) Equities Research shared. Some firms have decided to seek buyers after the credit crisis.
In spite of competitors, digital returns are “an area that we can also grow and prosper in”, Bennett said.
Alexander Paris, an equity analyst at Barrington Research Associates Inc., said, in an interview, yesterday that the company is undervalued and might attract bids from buyout firms.
Chairman Richard Breeden brought in Smyth to help turn around H&R Block. He brought back firm’s focus to tax preparation. He sold investment-adviser and mortgage units. The units had caused above $1 billion in losses attached to subprime home loans.
The company would focus on building market share rather than an unsuccessful effort to build a financial supermarket.
Bennet plans to continue a strategy for adding retail clients that began under Smyth, who was previously president of McDonald’s Corp.’s European unit. Mc Donald’s symbolized consistency which would be carried forward.
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