E&Y boosts income through internal services
Ernst & Young sees income hike through providing services to other member firms
ERNST & YOUNG’S INCOME was boosted by a big increase in services provided to other member firms in 2011.
Total income for the year was £1.61bn, with accounts recently filed at Companies House showing total income as £1.47bn in fees – a rise of £109m on 2010 – and £145m from ‘other operating income’ – up from £91m.
E&Y told Accountancy Age ‘other operating income’ is earned through providing support services and staff to other members of the international network.
E&Y published its headline figures last month, when UK managing partner Steve Varley said collaboration across the firm worldwide has been “critical to growth”, adding: “This also reflects our position as the most global business in our industry. Indeed, more than 10% of our UK partners are currently working in international roles.”
Operating expenses rose £156m to £1.24bn.
European managing partner Mark Otty received a £197,000 pay rise in 2011, an increase of 9.4% on the previous year, taking his salary to £2.3m.
The firm’s profits rose to £356m, from £336m, a 6% increase. Profits per partner have grown 3.8% to £635,000 since July 2010.
The number of partners stayed fairly static at 537, up from 534 in 2010.
Varley said: “We made the decision several years ago to increase significantly our investment in our business and, once again, this year’s growth demonstrates that taking a longer-term view pays off.”
Retirement benefit liabilities fell significantly from £316m to £196m, but the staff benefits reserve also dropped, down £120m to £187m.
Members’ other interests, a pot made up of profits to be divided and other equity reserves, rocketed from £22m to £156m.
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A spokeswoman said the increase in MOI is down to actuarial re-assessment of the staff pension scheme, which is “dependent on market conditions at the time of reassessment”.
E&Y’s actuarial gains leapt from £5m to £105m and the big fall in retirement benefit liabilities indicates that fluctuations in stock markets and valuations of underlying schemes are having a huge impact on accounts.