News
17 Oct 2016 11:30am

EY UK profits up but partner pay down

EY UK has reported a 7% rise in revenue to £2.15bn despite uncertainty caused by Brexit. The Big Four firm said the success was “driven by a focus on innovation and investment in technology”

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Caption: Profit per partner fell by 5% following increased investment in technology

Distributable profits before tax also grew 3% from £437m to £452m for the year ending 1 July 2016.

Average profit per partner, however, fell to £662,000, down 5% from £700,000 in 2015.

EY said this was due to investment in disruptive technologies, analytics, artificial intelligence, robotics as well as the firm’s innovation hub EYX based in Shoreditch, London. An increase in partner numbers also contributed to the decline in partner pay.

All service lines and regions experienced strong growth over the year despite uncertainty in the lead up to the EU referendum reducing the momentum of the firm’s overall performance.

EY’s tax department saw the largest growth, at 12.4%, while there were also big rises in assurance (5.8%) and transaction advisory services (6.2%).

EY’s financial services business had a record year with 12.7% revenue growth. Banking & Capital Markets and Wealth & Asset Management both grew by more than 15%.

“There was strong demand for our services in FY16 and it is encouraging that we grew all of our service lines. As an international full service organisation we are well equipped to respond to changing market conditions and will continue to work with our clients to help them with their growth aspirations,” Steve Varley, EY’s UK chairman said.

The firms also celebrated winning a number of new audits in 2016. “Following our audit successes last year with RBS, Royal Dutch Shell and Associated British Foods, we won several new audits in 2015-16, including Thomas Cook, Persimmon, Vedanta and Renishaw,” Varley said.

Varley added that strong growth across all of EY’s service lines, sectors and regions “has partly been driven by a focus on innovation and investment in technology both within our own business and in the services we provide to our clients.”

EY recruited over 4,000 people over the one-year period including more than 1,500 students. EY also had 62 new equity partners join the UK partnership this year.

Nearly 30% of the new recruits were women and 15% were from black and minority ethnic background, according to Varley.

Globally, the organisation reported annual revenues of US$29.6bn for its financial year ending 30 June 2016. This represents a 9% increase over financial year 2015 revenues in local currency.

Despite record global growth, Varley suggested that the EU referendum contributed to global uncertainty.

“There have been a variety of economic and political headwinds affecting global growth with the uncertainty around the impact of Brexit being one of a number of challenges that companies are having to consider," said Varley.

Sinead Moore

 

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