ERNST & YOUNG’S INCOME was boosted by a big increase in services provided to other member firms in 2011.
Total income for the year was £1.61bn, with accounts recently filed at Companies House showing total income as £1.47bn in fees – a rise of £109m on 2010 – and £145m from ‘other operating income’ – up from £91m.
E&Y told Accountancy Age ‘other operating income’ is earned through providing support services and staff to other members of the international network.
E&Y published its headline figures last month, when UK managing partner Steve Varley said collaboration across the firm worldwide has been “critical to growth”, adding: “This also reflects our position as the most global business in our industry. Indeed, more than 10% of our UK partners are currently working in international roles.”
Operating expenses rose £156m to £1.24bn.
European managing partner Mark Otty received a £197,000 pay rise in 2011, an increase of 9.4% on the previous year, taking his salary to £2.3m.
The firm’s profits rose to £356m, from £336m, a 6% increase. Profits per partner have grown 3.8% to £635,000 since July 2010.
The number of partners stayed fairly static at 537, up from 534 in 2010.
Varley said: “We made the decision several years ago to increase significantly our investment in our business and, once again, this year’s growth demonstrates that taking a longer-term view pays off.”
Retirement benefit liabilities fell significantly from £316m to £196m, but the staff benefits reserve also dropped, down £120m to £187m.
Members’ other interests, a pot made up of profits to be divided and other equity reserves, rocketed from £22m to £156m.
A spokeswoman said the increase in MOI is down to actuarial re-assessment of the staff pension scheme, which is “dependent on market conditions at the time of reassessment”.
E&Y’s actuarial gains leapt from £5m to £105m and the big fall in retirement benefit liabilities indicates that fluctuations in stock markets and valuations of underlying schemes are having a huge impact on accounts.
Revenue and profitability growth in on the rise for CPA firms, found a survey from the American Institute of CPA’s and its subsidiary CPA.com
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Carter Backer Winter has acquired Edwards Financial Services, expanding its financial planning department
New growth opportunities in Aberdeen, North East Scotland, are being invested in by Grant Thornton