E&Y and Arthur Andersen show steady growth

Ernst & Young will today reveal UK fee income growth of 19% fromKPMG merger failure. #531m to #633m for the year to 26 June.

The average partner at the firm generated #308,000 profit, also up 19% on last year, while partnership funds employed rose by 22% to #190m.

E&Y chairman Nick Land said the results, audited externally for the first time by BDO Stoy Hayward, were ‘in-line’ with the firm’s aims at the start of the year. But he added there was ‘always room for further improvement’.

The collapse of merger talks with KPMG did not seem to hurt the business.

‘We kept our market focus and did not internalise,’ Land said.

E&Y’s big growth area was in management consultancy, which soared ahead by 43% on the previous year.

Land added the firm’s aim for the next year was true global integration.

An announcement on E&Y’s global structure is expected next month.

Group A firm Pannell Kerr Forster, which also published its UK results today, filed less impressive figures. It notched up a 2% hike in its fee income, to #74.4m, for the year to 30 April, while net profit was up just 1% to almost #16m.

A reduction in partner numbers contributed to a rise in average partner earnings of 12.5%.

Despite the figures and persistent industry rumours, managing partner Martin Goodchild ruled out merger as the way to improve the firm’s figures. He said PKF hoped to grow organically by taking on quality staff.

He added the firm was hoping to snatch disillusioned clients from Big Five firms which, he said were now trying to maintain an uneasy balance between financing their global ambitions while trying to maintain a local image.

Arthur Andersen last week reported a 17% rise in worldwide revenues to $6.1bn for the past fiscal year which represented the firm’s 85th year of uninterrupted growth.

The firm’s European region, which also includes results from the Middle East, India and Africa, saw a growth of 22% to $2.14bn. The biggest growth was in Latin America where revenues rose by 32% to $280m. Andersens’ largest service category, the Assurance and Business Advisory practice, grew by 10% worldwide.

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