Varley upbeat as EY reveals investment plans
EY posts 6% rise in UK revenues and plans investment in big data and cyber security advisory services
BIG FOUR firm EY has announced plans to pump more resources into offering ‘big data’ and cyber security advisory services, doubling the size of both teams over the next two years.
The announcement came as the firm’s UK arm posted a 6% rise in revenues to £1.7bn for the 12 months to 28 June with UK & Ireland chairman and managing partner Steve Varley highlighting the service lines as future growth areas for EY.
“We’ve had great success in our big data analytics practice and in cyber security services,” Varley told Accountancy Age. “We’re feeling in really good shape.”
The firm posted growth in three of its four service lines – advisory, assurance and tax – with only transaction advisory services reporting a drop in sales because of an “exceptionally tough” market in the first half of the year.
Advisory grew 17% to £486m in the year, with big data, cyber-crime and financial regulation driving demand, while audit and tax both grew by 6% to £507m and £486m respectively. Audit, in particular, has been a successful line for the firm, which picked up the audits of FTSE 100 companies BG Group and Land Securities over the past year.
The Competition Commission is due to publish its final report on audit market reform early next week, adding to the environment of more frequent audit tendering among Britain’s top companies that has existed since guidelines were introduced by the FRC last year.
Despite an 11% slump in transaction fees to £273m, the firm noted an “increased impetus and confidence” in its business during the second half of the year. “It was a year of two halves,” said Varley. “In the first half debt markets were tight with not much corporate transaction activity…but we are seeing a sea change with more transactions…and IPOs coming back.”
Partner profits at the firm increased to £368m, up from £328m in 2012, with average distributable profit per partner up to £651,000 from £597,000.
The firm also said it plans to hire 2,400 people over the next 12 months, with 1,300 student places also available over the next financial year. Globally, EY plans to hire 55,000 people.
According to Varley, the firm has experienced a “phenomenal” response from graduates following the launch of a new corporate strategy and tagline earlier this year.
Earlier this week, EY published a 7.7% increase in global revenues to $25.8bn (£16.2bn), representing its fasted pace of growth in five years.
