Tax fees drive EY to record income, but partner pay falls
EY shrugged off the disruption of its failed break-up plan to announce record UK revenues of £3.76 billion.
The Big Four firm’s income climbed by 16% in the 12 months to the end of June, surpassing its previous record of £3.23bn last year.
Distributable profit before tax rose 4% to £659 million, from £634m in the previous period.
The growth was driven by EY’s tax division, where revenues were up 20% year-on-year, as companies outsourced their tax compliance.
However, spending on consulting work has fallen which had seen a slowing of growth in that division, with revenue up 18% against 33% last time.
Average partner pay was down to £761,000 from £803,000 last year following investment in areas such as artificial intelligence and hiring partners.
Hywel Ball, EY’s UK chairman, described the results as “impressive” after a year of debating a plan to split itself into separate audit and consulting businesses which was abandoned.
Mr Ball said he remains convinced that EY’s business model will have to change at some point.
“The strategic issues that our separation discussions tried to address are still there,” he said. “If anything, those dynamics are increasing and so, at some point, we will have to answer those issues.”
EY has further strengthened the UK business with 267 new partners, marking a 10% increase in EY’s total partners in the UK to 1701, compared to 1534 at the start of the last financial year. Of these, 42% (112) are equity partners and around a quarter (62) are based outside London. There are now 85 partners in Scotland and a total headcount of 1300.
EY Scotland Managing Partner Ally Scott said: “It’s been a great year for the firm across the UK and here in Scotland.”