Deloitte in the UK and Switzerland has reported a revenue of £3.97bn in its yearly report, and an increase of 10.9%, for the year ended 31 May 2019.
This figure is up from £3.58bn in 2018, where the Big Four firm was second on Accountancy Age’s 50+50 list of accountancy firms. If they posted their 2019 figure a year ago, they would have been on top of the rankings.
In its report, the firm also showed its investments in other areas of business, including in improved audit quality, investment outside of London, new jobs, improved diversity and charitable efforts.
Richard Houston, UK and North and South Europe senior partner and chief executive, said: “Our clients and our own profession are facing a time of substantial change, challenge and opportunity with slowing economic growth, ongoing political uncertainty and the impact of technology disruption.
“Over the past year we have supported both the public and private sector navigate the changing and challenging backdrop, whether helping manage the uncertainty of Brexit, transforming businesses through the use of digital technologies, or addressing critical risks such as cyber.
“Our 2019 results reflect the long-term investment we have been making across our business and, in particular, in audit quality and the training, technology and talent required to support it. This investment has helped us succeed in the market and improved the financial performance of our audit business.”
Following the release of the report, the Financial Times also reported that equity partners at the firm will receive an average profit share of £882,000 for the year to June 2019, a rise of 6% on the previous year – up from an average of £832,000.
Deloitte’s revenue from Audit and Risk Advisory services grew by 8.1% to £1,110m (of which Audit & Assurance was £582). Consulting increased by 9% to £952m, Financial Advisory by 10.5% to £507m and revenue from Tax and Legal services rose by 17.8% to £862m.
Distributable profit was £617m, up from £584 in their 2018 report, which benefited from a one-off gain on the sale of an investment, lowering provisioning charges and currency gains. Without this, distributable profit would have been flat.
The firm’s total tax contribution was £1,057m in 2019. This was made up of £638m of taxes collected on behalf of HMRC (VAT, PAYE and employee national insurance) and £419m of taxes borne by the firm (partner income taxes, national insurance, corporation tax and employer’s national insurance).
Investment in audit improvement
The much-publicised need for accountancy firms to improve the quality of their audits was made clear in an FRC report, which found that 76% of Deloitte’s audits of FTSE 350 companies reviewed required no more than limited improvements in 2017/18.
A year later, the report found that that had improved to 84%. Deloitte has said that this is due to investment in new audit technologies as well as developing an audit product ‘fit for the need of modern society’.
Stephen Griggs, managing partner of Audit & Assurance at Deloitte, said: “We have been consistent in our support for change in the audit market and are positive about many of the proposals that have been put forward. We are looking at how to adapt the scope of our audit to match the needs of stakeholders and the evolving reporting landscape.
“Companies’ annual reports have undergone significant change in recent years and now contain much more information about how businesses create sustainable value, their business model and their viability – it is vital that the audit responds to meet this evolving reporting landscape.
“We also need clarity about what all parts of society – the public, government, investors, business – expect of an audit and the ongoing Brydon Review will provide much needed independent insight.
“However, we do not agree with proposals that would see any form of separation of the audit business from the rest of the firm. Audit quality is considerably enhanced by the investment capacity and access to specialists that being part of a much larger and diverse multi-disciplinary firm allows.”
Other notable improvements
The firm’s annual report boasted other improvements as well. Deloitte has invested in regions outside of London, with its regional business revenue growing 15%. Their regional employee numbers are also up by 13%, now exceeding 7,500 and it is investing in areas such as Reading, Cardiff and Belfast.
During the financial year, over 4,000 people joined the firm, including 1,200 graduates and school leavers in apprenticeships programmes. The firm promoted 78 partners, of which 32 (41%) were woman, a near threefold increase and taking Deloitte’s female partners to 223 (21%).
Deloitte has said that it also supported over 416,000 people through volunteering, pro bono work, donations and fundraising, and reached a sustainability milestone when it opened its new headquarters in London which utilises onsite renewable energy sources and produces 100% green electricity.