‘Big four’ accountant reports better revenues and profits

Accountant and business adviser EY has grown UK revenues by a steady 1.5% and hired more than 2,600 people, its latest figures have revealed.

UK fee income grew to £2.45bn in the financial year ending 30 June 2019, increasing from £2.41bn the previous year.

Distributable profits before tax increased from £472m in 2018 to £477m in 2019.

Average distributable profit per partner decreased from £693,000 last year to £679,000 in 2019

The total tax contribution for 2019 was more than £927m.

Globally, EY reported annual revenues of $36.4bn for the financial year ended June 2019. This represents an 8% increase in revenues in local currency, versus 7.4% in 2018.

Despite a challenging business environment, revenues in transaction advisory services and tax grew strongly by nine per cent and eight per cent, respectively, while advisory and assurance revenues declined on previous years by three per cent and five per cent.

Over the past five years, EY has achieved a UK compound annual growth rate (CAGR) of six per cent.

Steve Varley, EY’s UK chairman, said: “We are very clear about the crucial role that our work plays in building and sustaining trust and confidence in the capital markets and helping to improve the attractiveness of the UK as a centre for business.

“That’s why it’s important that we have continued to invest in the right places, despite the uncertain economic environment.

“This year alone we’ve hired over 2,600 people, with more than a third of all roles in our regional business, invested around £31m in training and development, and have made significant investments in our tech capabilities.

EY has continued to invest in its regional business across the UK, with 31% of its 2,600 new recruits based in its regional offices and 55% of its graduate and student hires based outside of London.

Sustained regional growth has seen EY continue its investment in its people across the regions, with a number of strategic hires and promotions made across EY’s Manchester and Liverpool offices in the North West.

EY’s North West team had another strong year advising on several high-profile deals across a broad range of sectors.

Bob Ward, managing partner for EY in the North West, said: “It’s been another good year for EY and one that has seen growth both nationally and across the North West.

“EY’s continued commitment toward growth in the regions is once again illustrated this year with a headcount of well above 700, some fantastic senior hires and promotions.

“EY is committed to the North and continues to invest in local talent to ensure that we can meet our clients’ growing needs with people based in the North who know the market and can, therefore, provide the best possible advice.”

As well as lateral hires, EY also welcomed a total of 80 graduates and apprentices – more than 25% more than the previous year.

The new cohort, comprised of 64 graduates and 16 apprentices split between its Manchester and Liverpool offices, will be working towards professional qualifications equivalent to either a bachelor’s or master’s degree upon completion.

Bob Ward added: “We were delighted to welcome so many new graduates to EY this year and are thrilled that our apprenticeship degree continues to grow in popularity.

“Apprentices are vital to our business, driving fresh thought and innovation throughout our services.

“These schemes are a great opportunity for students from all walks of life to access work experience and a degree qualification with an international firm, without the burden of tuition fees.”

This year also saw EY rank in the top 35 of the Best Companies to Work For in the North West 2019. The list represents the 75 organisations with the highest Regional Best Companies Index (RBCI) scores.

Steve Varley said: “After multiple years of strong UK growth, we have continued to prioritise the infrastructure needed to deliver high quality audits by investing in compliance, our people and new technologies.

“While there’s more to do, I’m encouraged by the improvements in our latest audit quality scores from the Financial Reporting Council (FRC). The FRC inspections looked at 18 of our audits this year, with 89% of the nine FTSE 350 audits rated in the top category.

“We audit around 5,000 organisations in the UK and are increasing our focus to ensure that every one of these audits meets the highest standards. I’m confident that we are taking the steps needed to build on these results in the future.”

Looking ahead, he said: “I am feeling very optimistic about the future health and growth of our business.

“The economic environment over the next 12 months is likely to be challenging as the UK economy adjusts to life outside the EU, but I’m confident that we have a resilient and flexible UK business that is well placed to adapt to a slower growth economy and is also able to draw on the strengths of EY’s global network.

“We have robust plans in place for our own business and remain focused on supporting our clients.

“We will also continue to play an active and constructive role in the current reviews into corporate reporting and the audit profession.

“We recognise the importance of the current dialogue around the profession and its regulation and are committed to ensuring that we continue to evolve to best serve business, investors and other public interest stakeholder needs.

“We believe the right set of comprehensive changes is needed to address corporate reporting, the scope of the audit, a strengthened regulator, and the accountability and regulation of both auditors and company directors.”