Expansion expected in Scotland
‘Vital to maintain market activity’ says EY
Scottish growth of the big four accountancy firm comes as UK chairman Steve Varley urges the government and business to work together to maintain momentum in market activity.
Headcount in Scotland is now above 1,000 after it added 123 joiners and promoted 131 staff in its offices in Aberdeen, Edinburgh, Glasgow and Inverness.
Mr Harvey said: “Our business is going from strength to strength in Scotland. Our footprint on the ground has increased to a record high of more than 1,000 people with 38 partners dedicated to the Scottish market including three internal promotions.
“This provides just a snapshot of our commitment to Scotland and the Scottish economy.
“In the year ahead we will look to target further expansion particularly in corporate finance.”
Mr Varley said there are signs of an improving market with activity levels picking up in the first quarter.
He said that for the momentum to continue it was vital for business and government to work together to ensure the UK remains “attractive, competitive and connected in the global economy.”
The practice reported UK fee income growth of 7% to £2.15 billion for the year ending 1 July, up from £2.01bn in the previous year.
Over the last five years it has grown by 8%, adding almost £700 million to its revenue.
EY recruited more than 4,000 people across the UK, including more than 1,500 student places. EY also added 62 equity partners to the UK Partnership, building on the record 95 equity partners admitted in the previous year.
While overall profit is up, the firm’s investment programme and increase in partner numbers has seen a 5% fall in average distributable profit per partner from £700,000 to £662,000.
Mr Varley 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 both within our own business and in the services we provide to our clients.
“We continue to evolve and innovate our business – adapting and responding to new disruptive technologies.”
The slowdown in the run up to the EU Referendum reduced the momentum of overall performance, however all service lines and regions reported strong growth over the year. Distributable profits before tax increased by 3% from £437m to £452m.
Mr Varley said: “I am confident that our global structure and deep sector experience will continue to be a differentiator. We are already seeing signs of an improving market with activity levels picking up in our first quarter of the new financial year.
“In order to maintain this momentum it is vital that business and government continue to work together to ensure the UK remains attractive, competitive and connected in the global economy.”
Globally, the organisation reported annual revenues of $29.6bn for its financial year ending 30 June 2016. This represents a 9% increase over 2015 in local currency.
EY saw significant growth across all of its four service lines in 2016.
Tax saw the largest growth – 12.4% to £581m – with strong performance in its M&A practice, UK corporate tax advisory teams and the regional tax business. The global compliance and reporting team significantly increased their market share. Law also made great progress in its first full year of trading.
Assurance grew by 5.8% to £619m, fuelled in part by the prior year’s audit wins. EY’s success in winning new audits continued during 2016 and focusing on audit quality continues to be an absolute priority. The positive results of the Financial Reporting Council’s (FRC) annual audit quality inspection report reflect the significant level of investment EY has made.
Transaction Advisory Services (TAS) grew by 6.2% to £344m. The Advisory business grew by 3.8% to £606m, supported by good growth overall and the adoption of disruptive business models and technologies.
Financial Services, EY’s largest industry sector, has had a record year. In its eighth consecutive year of growth, it grew revenue by 12.7%, and both Banking & Capital Markets and Wealth & Asset Management grew by more than 15%.
The financial services business outside of London continued to grow strongly, in particular in Bristol, Edinburgh, Leeds, Manchester and Newcastle. The FinTech team, is now one of the largest in UK financial services.