EY continues its run of strong growth as UK clients’ appetite to work with rapid-growth markets accelerates
10 October 2013
- UK revenues up 6% to £1.7 billion
- EY reports 2013 global revenues of US$25.8 billion
- More than 1,200 UK jobs created and 1,300 student places
- In the next year EY is looking to hire 2,400 people and offer 1,300 student places
London, Thursday 10 October 2013: EY has reported UK turnover growth of 6% to £1.721 billion for the period ended 28 June 2013, up from £1.631 billion the previous year. Globally the firm reported revenues of US$25.8 billion for the same period – 7.7% growth over the previous financial year in local-currency terms.
In the UK the firm grew in three out of four of its service lines. Advisory posted growth of 17% to £486 million (£416m in 2012), Assurance and Tax both grew by 6% to £507 million (£478m) and £455 million (£431m) respectively, while Transaction Advisory Services (TAS) posted an 11% decline in revenues to £273 million (£306m).
The total taxes paid to the UK Exchequer by the firm, including the contribution of partners, are estimated at £669 million (£614m in 2012). The taxes collected within that total – which comprise employee taxes, National Insurance and VAT – are estimated at £409 million (£385m) and demonstrate EY’s wider economic role and contribution.
Increased momentum in the UK business
Steve Varley, Chairman and Managing Partner UK & Ireland at EY, said, “Posting 6% organic revenue growth at a time when business investment levels in the UK remain historically weak, is a good achievement. It demonstrates that we are winning in the market and that our investment programme is paying dividends – we have consistently performed at the top of our industry in the last three years.
“I am very encouraged by the increased level of confidence and momentum in our UK business, as the economy continues its recovery. Our clients are optimistic about the future, as are we, emboldened by our new global vision and purpose – building a better working world – formally launched this year.”
Smart investors in people
One of the biggest student recruiters in the country, EY took on 80 school leavers, 700 graduates and 500 undergraduates in 2012/13. The firm also created over 1,200 UK jobs in the last year.
Some of those jobs were offered to graduates on the EY Smart Futures programme. Now in its second year, the flagship programme helps young people (aged 16-17) from underprivileged backgrounds increase their chances of securing employment – including at EY.
“We have made a very firm commitment to invest in the future of Britain’s bright young people and to play our part in helping tackle social mobility in the UK – contributing to a better working world for our people, our clients and our communities,” Varley comments.
EY recently announced plans to recruit 2,400 experienced hires in the UK over the next 12 months, from Inverness to Bristol, in response to growing demand from its clients for services; it was also ranked second in the world only to Google, in Universum’s annual index of the world’s most appealing employers – and number one globally for professional services. The firm is recruiting at all levels, from school leaver to partner, and across all four of its service lines – with 1,300 student places also available this year. Globally EY plans to recruit 55,000 people.
EY had an average of 565 partners in its UK business during 2013, up from 549 in 2012, having announced 52 new equity partners during the year. Profit to be divided amongst partners for 2013 was £368 million, up from £328 million in 2012. Average distributable profit per partner for 2013 was £651,000 up from £597,000 in 2012.
Winning in the market
EY’s growth has been driven by clients’ continued appetite for trading with or expanding into overseas markets – its international services business posted double-digit growth.
“Our firm’s global structure and scale in rapid-growth markets is really helping to drive our success internationally – EY’s UK offices provide a global gateway for our local clients. We have a growing number of EY people from around the world working in the UK on assignments and more secondment opportunities available for our UK people overseas,” says Varley.
The firm has also had some major client wins in the last year, including two FTSE 100 audits – BG Group and Land Securities.
The transactions market was exceptionally tough in the first half of the year. But in the second half EY saw increased impetus and confidence in its TAS business, which has continued into the new financial year. This was bolstered by a shift in the market, but also by EY’s accelerated investment into services such as valuations & business modelling and post deal integration – both of which posted a double digit percentage increase in revenue.
The top growth sectors were financial services and the public & government sector – the latter in part due to EY winning work with the Audit Commission. While big data, cyber-security and financial regulation were some of the issues driving demand for advisory services in particular.
Varley says EY will be investing more people and resources into delivering services to clients on the “hot issues” such as big data and cyber-security – with plans to double the size of both teams over the next two years. “We remain relentlessly focused on providing exceptional client service to the multinationals, entrepreneurs and social enterprises up and down the country whose growth we support every day.”
Supporting Britain’s social enterprises
Investing time and resource into Britain’s social businesses is a key priority for EY. It currently supports more than 150 social enterprises in the UK – providing entrepreneurs with the tools, advice and networks they need to grow their organisations. This includes professional support to the Big Venture Challenge, helping 30 social entrepreneurs scale their businesses.
EY also works with the Social Business Trust (SBT), of which it is a founding member. It provides secondees to the SBT core team and its portfolio companies, undertaking project work as necessary. Since SBT was formed two years ago the support of EY and the other member firms has contributed to an average growth of 77% across the portfolio and the creation of around 2,300 jobs.
20% of UK partners are women and 8% BME
Another priority for EY is its commitment to improving diversity & inclusiveness through-out the talent pipeline. EY is working hard to achieve the UK stretch targets it set itself last autumn for 30% women and 10% black and minority ethnic (BME) new partners in 2015. The overall partner population is currently 20% women and 8% BME.
Varley comments, “While we lead the Big Four on gender diversity, we still have some way to go to realise our ambitions and meet our targets. Neither we nor UK plc can afford to be complacent in pushing for greater diversity and inclusiveness in business.”
Varley concludes, “Our UK business is emboldened by our new global vision and purpose, and client confidence is starting to turn a corner as the UK economy shows signs of growth. In the year ahead we will go beyond our commitment to delivering exceptional service to our clients. We will use our expertise to team with other companies that share our purpose and commitment to building a better working world, contributing to the growth and success of our business, our clients’ businesses, our people and the communities in which we work.”