Profits per partner have been hit at EY as the Big Four firm continues to invest in people, businesses and tech.
EY has had a successful year with climbing revenue growth and distributable profits – but profit per partner has dropped.
The firm grew revenues by 7% to £2.15bn, for the y/e 1 July, with distributable profits up 3% to £452m from £437m. This takes EY’s compound annual growth rate over the last five years to 8%, adding almost £700m to its revenue during that time.
Some 62 new equity partners joined the UK partnership this year, which has reduced average distributable profit per partner to £662,000, down 5% from £700,000 in 2015. Last year 95 new partners were appointed.
Tax saw the largest growth among EY’s service lines, of 12.4% to £581m, with strong performance in its M&A practice, UK corporate tax advisory teams and the regional tax business. Assurance grew by 5.8% to £619m, fuelled in part by the prior year’s audit wins. Financial Services grew by 12.7%, Transaction Advisory Services (TAS) grew by 6.2% to £344m and the advisory business grew by 3.8% to £606m.
Steve Varley (pictured), EY UK chairman, said: “We had another good year at EY, with strong growth across all of our service lines, sectors and regions. This has partly been driven by a focus on innovation and investment in technology.”
The investment in technology included the acquisition of Seren and Integrc, the former a digital consultant and the latter as privately owned provider of government, risk and compliance (GRC). Additionally, EY invested in a Shoreditch-based innovation hub EYX to support and create business. These investments in the firm’s continued multiyear programme have added to the overall profit.
Regardless of the run up to the EU Referendum, which may have reduced the overall performance momentum, EY have still maintained a successful year, Varley explained.
Steve Varley, added: “There have been a variety of economic and political headwinds affecting global growth with the uncertainty around the impact of Brexit. However, I am confident about our global structure, and we are already seeing signs of an improving market.”
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