- All four service lines reported growth
- Recruitment of over 4,000 people, including more than 1,500 students
- 62 equity Partners join the UK Partnership
- Distributable profits up 3% from £437m to £452m
- Significant investment in disruptive technologies, analytics, artificial intelligence, robotics and innovation hub EYX based in Shoreditch
The slow-down in the run up to the EU Referendum reduced the momentum of EY’s overall performance, however all service lines and regions still reported strong growth over the year. Distributable profits before tax increased by 3% from £437m to £452m.
Cambridge highlights
The performance of EY’s 180-strong Cambridge practice was in line with the UK firm’s strong growth during FY16. Regional highlights from the last financial year include:
- Nick Gomer appointed Office Managing Partner in EY’s Cambridge office, leading the regional practice across the East of England.
- EY employs 180 people at its Cambridge office – a 7% increase in headcount over the past 12 months.
- 100 new joiners in the Cambridge office over the past 12 months, including 25 graduates, school leavers and interns.
- Promotion of two Directors: Lauren Houghton in Assurance and Kim Chapman in People Advisory Services.
- The tenth year of the EY Charity Quiz, which has raised over £50,000 for Cancer Research and Arthur Rank Hospice.
Nick Gomer, Office Managing Partner at EY in Cambridge, said: “Investing and developing in our people, business and brand have been vital to our success in recent years, and this continued in FY16. We promoted two new Directors who, along with the 100 graduate, school leaver and experienced hires we took on, will help to grow our business in the years to come.
“Cambridge and the East of England is an important market for EY and this has been reflected by the firm’s continued investment in the regional business. Over the past 12 months, we’ve focused on expanding our service line offerings and growing local teams to meet increased demand for our services and strengthen the support EY offers to mid-market firms across the region.”
Strong growth, says EY’s UK Chairman
Steve Varley, EY’s UK Chairman, says: “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.
“We continue to evolve and innovate our business – adapting and responding to new disruptive technologies. Our data analytics capabilities are now a cornerstone of how we deliver and drive our Assurance business. Following our audit successes last year with RBS, Royal Dutch Shell and Associated British Foods, we won several new audits in 2015-16, including Thomas Cook, Persimmon, Vedanta and Renishaw.”
Steve continues: “There have been a variety of economic and political headwinds affecting global growth with the uncertainty around the impact of Brexit being one of a number of challenges that companies are having to consider. However, 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 US$29.6b for its financial year ending 30 June 2016. This represents a 9% increase over financial year 2015 revenues in local currency.
Business Performance
In the UK, 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, delivering sustained growth in a challenging market; this is a robust reflection of the deep industry expertise and strength of strategic advice TAS teams provide to clients on all aspects of their capital agenda. 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. It was an outstanding year for the FinTech team, and it has developed the one of the largest FinTech, data androbotics practice in UK financial services. Its investment in audit, capital markets, innovation, and our managed services business, which performs tax and regulatory services for clients, will continue to drive growth in financial services in 2017.
Steve says: “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.”
Technological Innovation
EY’s investment also extended to its technology capabilities, including improvements to its audit tools and the setup of a Shoreditch-based innovation hub EYX. EYX works with clients and startups to support innovation and create business value using key disruptive technologies such as blockchain, artificial intelligence, augmented reality and robotics.
EYX works closely with Chief Innovation Officers in each service line to develop and enhance the firm’s offerings; as technology continues to disrupt and revolutionise the way EY and clients do business.
EY acquired Seren, a 60-strong digital consultancy based in London’s tech hub, at Silicon Roundabout. The acquisition was the first of its kind for EY in the UK, and is part of continued investment and growth on a national and global level. It also made another technology acquisition - Integrc, a privately owned, leading provider of governance, risk and compliance (GRC) services to companies that run SAP.
The establishment of EYX, the Seren and Integrc acquisitions combined with new ways of working such as “hack” events and crowdsourcing put EY at the forefront of disruption and innovation.
EY was also the first and only member of the Big Four to sign a membership deal with Innovate Finance, the leading global FinTech association in the UK, to collaborate on a rolling talent programme and develop cutting-edge research to support the FinTech community and champion the UK as the global centre of FinTech innovation.
While overall profit is up, the firm’s continued multi-year investment programme and increase in Partner numbers has reduced average distributable profit per Partner to £662,000, down 5% from £700,000 in 2015.
Talent
EY recruited over 4,000 people across the country, including over 1,500 student places. EY also had 62 new equity Partners join the UK Partnership this year, building on the record 95 equity Partners admitted last year.
Steve says: “When I reflect on the year the one thing I am most proud of is the 4,000 people we have recruited and the 62 new equity Partners who have joined the UK Partnership – nearly 30% were women and 15% were from a Black and Minority Ethnic (BME) background – a strong performance against our 30% and 10% targets respectively. We are investing for the future and diversity and inclusiveness is a core part of this.”
EY’s commitment to diversity and social mobility was further enhanced this year as it removed academic qualifications from its entry criteria for graduates, undergraduate and school leavers. The firm’s new assessment tools are designed to look at a candidate’s true potential, giving every applicant the opportunity to prove their abilities. This initiative was implemented to ensure that EY recruits talent regardless of background and is aligned with its efforts to drive diversity and inclusiveness across the business on a service line and regional basis.
Steve concludes: “EY continues to have a leading people culture with a transformational approach to developing talent. We create a positive working environment where our people feel empowered to achieve their personal and professional ambitions. I firmly believe that this culture has enabled us to achieve this year’s growth and will position us well for the year ahead.”
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Hannah Forrester
Media Relations Manager
0121 535 2997
07931491342
hforrester@uk.ey.com
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