Ernst & Young record strong growth for 2007

London 04 October 2007: Ernst & Young today release their UK annual results for the year ended 30 June 2007.

Highlights of the results include:

• 9% overall UK revenue growth to £1.23bn. Profits increased by 7% to £328m.
• Nearly 50% revenue growth over the last 3 years
• Other major markets of our Northern Europe, Middle East, India and Africa area (NEMIA) – South Africa, India and the Middle East - recorded more than 40% revenue growth
• A record number of people recruited in the UK this year (over 3,000 from 32 countries)
• Emerging markets and new services will drive growth for 2008

Mark Otty, Chairman of Ernst & Young in the UK says, “I am pleased with the strong performance we achieved in all parts of our business in the UK in 2007. Despite the considerable investment we have made in recruiting a record number of new staff and Partners our revenues and profits have held up well.

Mark, who is also Area Managing Partner for NEMIA adds, “The exceptional growth in the emerging markets also underline that our strategy of twinning more mature markets with those with great potential is already proving to be a successful one.”

Our results

Mark comments, “For the last twelve months we have given a clear indication that our revenue growth in the UK was going to be reduced from the Sarbanes Oxley inspired spike of 2006. The increase in our UK revenues of nearly 50% over the last three years out performs those of our three main rivals. Profits have also held up at 7% despite the expense of a major recruitment drive for Partners and staff.”

Our Assurance and Advisory Business Services practice grew by a creditable 8% in 2007, despite the decline in work relating to International Financial Reporting Standards and Sarbanes Oxley. In part this was driven by a near 100% increase in revenues for our new Business Advisory Services group.”

Both our Tax practice and our Transactions Advisory Service practice grew by 9% reflecting a strong transactions market. By sector we saw particularly strong growth from our banking, telecoms, utilities and Government teams.”

And further afield

Outside the UK, the NEMIA area as a whole showed 14% growth for 2007 with the emerging market practices of South Africa, India and the Middle East improving their revenues by 40%. Our NEMIA headcount increased by 12% to 25,600.

Our People in the UK

Our firm grew rapidly in 2007. We recruited a record number of people this year (over 3,000 from 32 countries) and our firm is now nearly 10,000 people in the UK with 6,000 staff and Partners in the London office, making it the largest Ernst & Young office globally. This autumn we welcomed over 750 graduates to Ernst & Young in the UK, again a record, and proportionally more than our major competitors.

Our people voted us the most improved company in the Sunday Times Best Big Companies to work for and fourth overall and over 90% said they are proud to work for Ernst & Young. There was a major investment in direct entry partners in 2007 – Ernst & Young appointed 30 in 2007 - twice the number of our competitors. We also have the highest number of female partners (15%) amongst our major competitors, and the second highest proportion of female qualified accountants at 40%.

There is a reason for this expansive growth in numbers of staff and impressive people credentials as Mark explains, “Ernst & Young has the most international and diverse leadership of any major professional services firm in the UK. We also believe that we are differentiating ourselves in the market place by implementing a distinctive values campaign which has received a favourable response from our people, our clients and other stakeholders.”

The Future

The medium term outlook for Ernst & Young in the UK and NEMIA is an excellent one.

As Mark explains, “In the short term the UK firm may feel the impact of weaker capital market activity in London, but the strength of our NEMIA organisational model with its strong links between mature and emerging markets will ensure that revenues across the Area will continue to show good growth in 2008.”