Distributable profits before tax increased by 1.7% from £464m in 2017 to £472m in 2018. Average distributable profit per partner increased by 2.4% to £693,000, compared to £677,000 in 2017.

The firm’s tax division grew by 7.3% to £680m, advisory by 3.8% to £653m and transaction advisory services was up by 1.5% £402m.

Assurance revenues fell slightly by -1.7% to £677m whilst audit grew by 4% to £458m. Financial services, the UK firm’s largest sector, grew by more than 7% this year, with strong performances in advisory, transaction advisory services, and more than 15% growth in capital markets and life and pensions.

There 71 new equity partners appointed over the year, and a total of 4,500 promotions, of which 45% were women and 25% BME. As regards recruitment, 1,247 students, including 268 apprenticeships joined EY - 41% female and 36% BME. The firm now has more than 14,500 people across 23 offices in the UK

EY says that from December, the UK board will be 50% men and 50% women.

The firm continued its expansion outside of London with new state-of-the-art offices in Manchester and Edinburgh and substantial investment in the Newcastle office. Additionally, 42% of all new hires were in offices outside of London.

EY made further investments in its enhanced high technology centres creating two new Wavespaces, which are part of a global network of nearly 20 similar centres around the world. Located in Shoreditch in London, and Edinburgh, they work closely with the advanced customer design centre – EY-Seren.

Audit

Steve Varley, EY’s UK chairman, said the market study currently being conducted by the Competition and Markets Authority (CMA), together with Sir John Kingman’s review and the Financial Reporting Council's (FRC) work on corporate reporting, presented a ‘golden opportunity’ to examine the role of audit and to reinforce the focus of auditors and company directors on audit quality.

Noting that EY has not been fined by the Financial Reporting Council (FRC) for audit work completed in the last five years, nor have any of its partners been sanctioned in respect to that period, Varley acknowledge the firm was ‘disappointed’ that its latest audit inspection results from the FRC declined from last year, with only from 82% of FTSE 350 audits requiring no more than limited improvements, compared to 92% in 2017.

‘We will continue our investment in even better technology and training for our people and further strengthened our long term audit quality programme which started in 2014 to challenge and guide our teams,’ he said.

Looking ahead to the challenges and opportunities unfolding in the next financial year Varley said: ‘How do we use the power of disruptive technologies? How do we challenge ourselves further to recruit in non-traditional ways to ensure we have a diverse talent base and retain a culture of high performance?

‘It is crucial that we maintain and improve confidence in our brand, the profession and UK business and we will continue to invest in people, technology and quality to ensure we deliver against this.

‘There will no doubt be headwinds of Brexit as the UK’s relationships with key trading partners are clarified. However, as a globally connected business we are confident and positive about the future outlook for the UK.’

Globally, EY reported annual revenues of $34.8bn (£27bn) for its financial year ending 30 June 2018. This represents a 7.4% increase in revenues in local currency and 11% in US dollars compared to 2017.

Report by Pat Sweet