EY revenue up 7 per cent to hit £2.150bn

The performance takes EY’s Compound Annual Growth Rate over the last five years to 8 per cent, adding almost £700 million to its revenue.

Announcing the results, EY said investment in Scotland continues to grow with the headcount now beyond 1,000.

Across the firm’s four offices in Aberdeen, Edinburgh, Glasgow and Inverness, EY has recruited 123 new staff and promoted 131 in the last financial year.

Mark Harvey, EY Senior Partner, Scotland, 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. Our newest partner, Ally Scott is one of Scotland’s premier dealmakers and will be driving the growth of our Transaction Advisory Services (TAS) practice and team.

“Financial Services remains a strong performer for EY in Scotland and is in a market leading position to respond to and embrace the challenges and opportunities for the sector including regulatory recalibration, the disruptive innovation of Fintech and the new industry considerations brought by the EU referendum result.”

Across its UK operations, 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, the firm said, as distributable profits before tax increased by 3 per cent from £437 million to £452 million.

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 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.”

Addressing the issue of Brexit Mr Varley said: “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.”

EY’s tax business saw the largest growth - 12.4 per cent to £581 million - 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 per cent to £619 million, 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 per cent to £344 million, 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 per cent to £606 million, supported by good growth overall and the adoption of disruptive business models and technologies.

Meanwhile, financial services, EY’s largest industry sector, posted a record year.

In its eighth consecutive year of growth, it grew revenue by 12.7 per cent, and both Banking & Capital Markets and Wealth & Asset Management grew by more than 15 per cent.

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 and robotics 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.

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 per cent from £700,000 in 2015.

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.

Globally, the organisation reported annual revenues of US$29.6 billion for its financial year ending 30 June 2016. This represents a 9 per cent increase over financial year 2015 revenues in local currency.