Accounting giant’s profits flat despite continued revenue growth

Deloitte’s profits were flat last year despite an eighth-consecutive year of revenue growth at the accounting giant.

Revenues rose to £3.58bn, up 6% in the year and 83% higher than in 2010.

The firm has changed how it reports its distributable profit figures, declaring them after tax for the first time, but like-for-like figures showed an 0.5% improvement on 2017. Equity partners shared £584m and received an average of £832,000,

David Sproul, senior partner and chief executive of Deloitte North West Europe, said: “This is a good result in a market facing slower economic growth and continued uncertainty.”

The firm said the reduced profit was the result of investment, highlighting its spending on its “internal centre of excellence for robotic process automation and the artificial intelligence studio, as well as in training and development of our people and audit quality initiatives”.

Revenues have increased 83% in eight years, but average profit per equity partner is yet to outperform 2010:

Deloitte is the first of the Big Four to reveal its results, which will come under close scrutiny following several high-profile fines this year for its competitors. Deloitte is currently being investigated for its audits of software firm Autonomy and building supplier SIG.

Audit and risk advisory services enjoyed a third-consecutive year of double-digit growth, breaking £1bn for the first time. The service line provides the largest revenue contribution, with 29%.

Sproul acknowledged concerns have been raised “over quality, conflicts of interest and a lack of choice” around audits.

He added: “These are serious concerns and we recognise the need for change. We must look at how the audits of the future match the evolving needs of stakeholders and society and address increasing business complexity.

“We have continued to invest in training and technology to help our 4,300 audit professionals deliver the highest quality audits and are proud to audit 27% of the FTSE 100.”

The North West practice has also maintained its focus on global markets this year.

Deloitte played a crucial role in the launch of the Manchester-India Partnership, an initiative designed to boost trade, investment, science and innovation ties with India.

As well as this, Deloitte partner Jo Ahmed was appointed as the Honorary Consul of Japan in Manchester to provide support for Japanese businesses and boost the cordial relations with the city and regional authorities.

Richard Bell, Head of Regions at Deloitte, said: “The North West practice continues to perform strongly in line with the national results, and has maintained its status as one of the largest and most influential regions.

“The performance across all service lines has been impressive, and we have developed a client base consisting of some of the largest private and listed businesses in the region. Eight consecutive years of growth is a great achievement, and it speaks volumes about our commitment to providing the best possible service to our clients.”

This article was updated on August 28 after clarification that corporate taxes had been deducted in the computation of distributable profit and average profit per equity partner, and were not therefore directly comparable with previous years’ figures.