Bold: Deloitte downplays defection
Connolly who was confirmed as the highest paid British accountant with a wage packet worth £2.9m ð said that his firm, currently in second place to Pricewaterhouse-Coopers, had turned down the opportunity to leapfrog its rival.
‘We had an outsourcing business that currently has revenues of about £300m and we decided to separate it – had we kept that in the firm we would already be the biggest, so we are not trying to pursue scale in terms of revenues at all,’ he said.
‘I don’t really care too much if we become the biggest if you mean having more revenue than any other firm. What we are very keen on is trying to be the most successful in terms of the rate of growth in our business because we think that does reflect the quality of our people and success.’
Deloitte’s UK senior partner said he was happy with the firm’s results. Revenue for the year ended 31 May 2004 was up 4.9% to £1,246m, while profit shot up 15.5%, even allowing for the cost of integrating 230 partners and 3,200 staff from Andersen in 2002.
Connolly said: ‘We are pretty satisfied with what we have achieved, and especially satisfied that we are absolutely on plan with our actions and activities connected with the big transactions we’ve had over the past couple of years: first the decision to recruit so many from Andersen and later to retain Deloitte Consulting.’
But consulting revenues fell for the second year running, down 8.7% to £294m. They rose for audit (up 4.4% to £359m), tax (up 14.2% to £377m) and corporate finance (up 11.9% to £216m). Profit per partner rose 15% from £539,000 last year to £621,000.
Connolly said the most important challenge for the year ahead was to address the reputational damage the profession has suffered ð but that to do so required a liability cap. ‘I would say it is crucial in the context of the markets’ desire to have auditors taking more responsibility,’ he said.
In an ironic twist it also emerged that Connolly’s record-breaking pay packet was the result of a £300,000 pay cut from £3.2m in 2003.