EY sees Scottish business grow 11 per cent in record year of tech investment

EY’s business in Scotland has seen growth of 11 per cent in the financial year ending 30 June, 2017, the firm has said.

EY’s Scottish practice, which recently took the Investor in Scotland award at the Scottish Business Awards, has continued to invest in its people and the business with an increase in headcount, the number of promotions and new joiners compared with the previous financial year.

As the largest professional services firm in Scotland, it currently has more than 1000 members of staff and 35 partners working across the four offices in Scotland (Aberdeen, Edinburgh, Glasgow and Inverness) with 300 promotions made and 299 people welcomed to the firm during the last financial year.

Mark Harvey, EY Senior Partner, Scotland, said: “EY’s business in Scotland has performed extremely well with a growth rate of 11%. Our business has managed to deliver strong results despite economic uncertainty demonstrating the value of our global strategy combined with local knowledge and insight.

“We work with the greatest businesses in Scotland from start-ups, family firms, entrepreneurial businesses to the largest listed companies and we take great pride in building strong, trusted relationships with our clients.

“We have also increased the gender diversity of our leadership team to the highest on record. Overall, 31 per cent of the partnership in Scotland is female with three key areas led by women – Laura Mair is Head of Tax, Sue Dawe is Head of Financial Services while Cara Heaney leads Global Mobility. Since July 2016, we have welcomed a total of seven new partners, three female and four male.”

The seven partners to join EY’s partnership in Scotland were: Cara Heaney, Caroline Mercer, Philip Milne, Aidan O’Carroll, Ally Scott, Lesley Stubberfield and Mike Timmins.

Mr Harvey added: “In November we will open the doors to our new, state-of-the-art office in Edinburgh giving us a 26 per cent increase in floor space to grow our team in Scotland. This move demonstrates our continued investment in Scotland and our confidence in the thriving business community here.”

The new office is part of EY’s global “EY@Work” transformation, which provides modern office space supported by the latest technology, design and environmental standards and will provide a world class environment to engage with our teams and our clients on technology related change.

In the UK, EY saw significant growth across all of its four service lines in 2017.

The professional services firm, which provides assurance, tax, transaction and advisory services, has reported UK fee income growth of 9.2 per cent to £2.35b for the year ending 30 June 2017, up from £2.15b in the previous year.

EY said it has added over £1.3b of organic revenue since 2010.

Steve Varley, EY’s UK Chairman, said: “This is a strong performance, particularly in an environment where Brexit and other geopolitical events have added a new dimension to doing business in the UK. We’ve seen growth across all of our service lines, sectors and our main offices across the UK.

“Our success this year is the result of a long-term global strategy. We have invested in new technologies and our people, as clients turn to us for more innovative products and services and adapt to domestic and global economic trends. At a time of global flux clients have also particularly valued our ability to draw on EY’s operations across 150 countries as they seek to navigate new trading opportunities with countries such as the USA, Australia, China and India. We are also helping our clients outside of the UK to access opportunities here.”

Globally, EY reported annual revenues of US$31.4b for its financial year ending 30 June 2017. This represents a 7.8% increase over financial year 2016 revenues in local currency.

Transaction Advisory Services (TAS) was the fastest growing service line with growth of 15.1 per cent to £396m. EY’s TAS business continues to be a leading practice in the UK for capital and transaction strategy, and the execution advice that it offers to organisations.

Assurance grew by 11.3 per cent to £689m, driven by increased revenues from prior year audit wins and accounting advice provided to clients either undertaking transactions or contemplating future changes to accounting standards. Audit quality continues to be a priority for EY and the positive results of the Financial Reporting Council’s (FRC) annual audit quality inspection report reflect the ongoing level of investment EY has made in this area. We are now not subject to any investigations by the FRC.

Tax grew by 9.1 per cent to £634m due to a strong performance in its M&A practice and its Global Compliance and Reporting team, significantly increasing market share. The Advisory business grew by 3.8 percent to £629m, supported by by growth across sectors and services and the adoption of disruptive business models and technologies to help clients.

EY’s largest industry sector, Financial Services, grew by more than 8 per cent in the UK, bringing total revenue growth over three years to 30 per cent.

Mr Varley said: “There was strong demand for our services in FY17. Given the uncertain market conditions it is a real achievement that we managed to significantly grow our business, invested where we needed to and continue to create efficiencies.”

Distributable profits before tax increased by 2.7 per cent from £452m to £464m.

Average distributable profit per Partner increased by 2.3 per cent to £677,000, compared to £662,000 in 2016.

EY has made strategic investments – both in the UK and globally – which have driven growth. These include new technologies such as the Capital Allowance Automatic Review Tool (CAART) which uses machine learning to accurately establish the correct tax code and can do 35 hours work in 15 minutes – improving efficiency by 99 per cent.

EY has also invested in EY Absolute, a cloud based tool, which delivers book-keeping, accounting and tax services to clients. EY has continued to innovate in other areas too, building out robotics, data and analytics, FinTech, cyber, Artificial Intelligence, audit technologies and blockchain solutions for its clients, which have been well received in the market.

Alongside EYX – created last year as EY’s UK innovation hub using key disruptive technologies – the firm has also launched EY Wavespace, a new global network of innovation centres.

EY Wavespace provides a collaborative and creative working environment for EY’s clients. It brings together companies from different sectors and disciplines to help clients discover the next big breakthrough that could shake up their industries.

Mr Harvey added: “It has been a record year of tech investment across the firm and this will continue into FY18 as we support our clients to transform their businesses. More and more Scottish organisations are investing in their digital capabilities and we have supported many with this transformation particularly in our assurance and tax practices with the use of Intelligent Automation (IA). An increased focus on innovation and emerging technologies stands to benefit business and the wider economy.”