Raymond Doherty 19 Dec 2016 11:39am

Grant Thornton UK profits take hit

Grant Thornton UK has reported a 2.5% increase in annual revenues to £534m for the year ending June 2016, but its profit per partner has dropped

It continues slow growth for the mid-tier firm, which is the fifth largest in the UK, as last year total revenues of £521m in the year to end June 2015 constituted an overall growth rate of 1.6%. This compares with reported growth rates of 10.6% in 2012, 13% in 2013 and 9% in 2014.

Profit before tax decreased by £10m year on year to £72m, while average distributable profit per partner dropped to £344,000, compared to £398,000 in the previous year.

Underlying revenue growth on a like for like basis was up 6.6% - on the back of strong performance in its tax services but the firm has this year invested heavily in technology and people.

"This year has been one of much change - as we seek to create a real shift in ownership and responsibility. We have made big investments in people this year – appointing 30 new partners, 19 of whom are internal promotions. We have invested over £17m in new people, promotions and increases for our people, building capacity for continued growth," said Grant Thornton’s chief executive, Sacha Romanovitch.

There was strong growth in the firm’s London audit, tax and growth services business (£7m or 5%). The strongest growth was seen in the operational advisory business which increased its revenues by £17m (21%).

"What seemed important pre-Brexit now seems critical in a post Brexit world. Undoubtedly there are uncertainties that will be reflected in businesses' appetite to progress their investment and growth plans. We are committed to delivering long term sustainable profits and this year we will continue to make key investments to set us up to do just that,” added Romanovitch.

In May 2015, the firm announced it had launched a consultation to become the first major accountancy firm to incorporate a shared enterprise model in a significant move away from the traditional partner-owned structure. In theory, it means that all of its 4,500 employees will have a say and a stake in how the firm is run.