EY’s UK fee income rose by 7% to £2.150bn for the year ending 1 July 2016, up from £2.010bn in the previous year, but the firm’s investment in a range of digital technologies was behind a 5% fall in partner profits
Distributable profits before tax increased by 3% from £437m to £452m. However, EY said the firm’s continued multi-year investment programme and the increase in partner numbers has reduced average distributable profit per partner to £662,000, down 5% from £700,000 in 2015.
Steve Varley, EY’s UK chairman, 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 invested heavily in new audit tools and made two new digital acquisitions – Seren and Integrc.’
Varley reported that the slow-down in the run up to the EU referendum reduced overall performance, but said the firm was already seeing signs of an improving market with activity levels picking up in the first quarter of the new financial year.
EY saw significant growth across all of its four service lines in 2016, led by tax which was up 12.4% to £581m. The firm cited strong performance in its M&A practice, UK corporate tax advisory teams and the regional tax business. Law also made what the firm described as ‘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, which included RBS, Royal Dutch Shell and Associated British Foods. New audit clients in 2015-16 included Thomas Cook, Persimmon, Vedanta and Renishaw.
EY’s transaction advisory services (TAS) grew by 6.2% to £344m, while the firm’s advisory business was up by 3.8% to £606m.
It was a record year for financial services, EY’s largest industry sector, which grew revenue by 12.7%, with both banking and capital markets and wealth and asset management growing by more than 15%.
Varley said: ‘There was strong demand for our services in FY16 and it is encouraging that we grew all of our service lines. As an international full service organisation we are well equipped to respond to changing market conditions and will continue to work with our clients to help them with their growth aspirations.’
EY recruited over 4,000 people during the year, including more than 1,500 students, and 62 new equity partners joined, of whom nearly 30% were women and 15% were from a black and minority ethnic (BME) background.
