EY, the professional services firm providing assurance, tax, transaction and advisory services, has reported UK fee income growth of 2.7 per cent to £2.41bn for the year ending 30 June 2018, up from £2.35bn in the previous year, with a five year compound annual growth rate of seven per cent.
Tax grew by 7.3 per cent, Advisory grew by 3.8 per cent and Transaction Advisory Services was up by 1.5 per cent. Assurance fell slightly by 1.7 per cent whilst Audit grew by four per cent. Financial Services, the UK’s largest sector, grew by more than seven per cent this year.
Distributable profits before tax increased by 1.7 per cent from £464m in 2017 to £472m in 2018.
The firm, which employs more than 14,500 people and has 681 partners in the UK, saw average distributable profit per partner increase by 2.4 per cent to £693,000, compared to £677,000 in 2017.
EY continued its expansion outside of London with 42 per cent of all new hires in offices outside of London.
EY’s 394-strong Yorkshire practice, comprising offices in Leeds and Hull, grew staff numbers by seven per cent during the year. Business growth has enabled EY to invest in its people with a number of high level strategic hires or relocations from London.
In January, EY appointed Mark Allcroft as Partner and head of Transaction Support for Yorkshire and the North East, underlining its commitment to building its deals business in the region. Mark has relocated back to Sheffield with his family, having lived in London for the last 13 years.
Meanwhile, Rob Jones and James Moore also recently relocated to lead and build out EY’s Debt Advisory and Transactions Tax businesses in the North and earlier in the year Hilary Heap and Mark Clephan were made Partners in the firm’s Valuations & Business Modelling and Corporate Finance teams respectively.
EY has also set up a new Global Trade team in the North, with the appointment of Onelia Angelosanto as director of the team, in response to growing demand for support and advice from businesses involved in international trade.
It makes EY’s one of the largest Global Trade and customs duty teams in the North, with a wealth of experience in advising and assisting businesses on customs and international trade matters from both a practice and industry perspective.
During the period to the end of June, in Yorkshire the firm made five senior manager or director promotions, as well as promoting Fay Parfitt and Paul McCann to associate partner. It also promoted Catherine Hackney (audit) and Mark Irving (tax) to equity partners. Since the year end EY has promoted Matthew Fox (assurance) and Chris Fitt (tax) to associate partners.
Suzanne Robinson, Yorkshire’s senior partner, leads EY’s Financial Accounting Advisory Services (FAAS) team across the North of England and Scotland, providing finance directors with practical solutions to financial reporting challenges. In the last year she has taken on a new board role at Phoenix Dance Theatre in Leeds.
Suzanne said: “EY sees a large part of its future growth coming from the regions and that’s why we are investing in our regional teams across all levels. In Yorkshire that means recruiting talent from the local market but also attracting people who choose to relocate, recognising that they are able to build their career at EY here, without having to be based in the Capital.
“The increasing seniority of some of the appointments and investment decisions being made in the North demonstrates EY’s recognition that its leadership structure needs to include those who can give insight and perspective on what’s happening across regional markets to ensure EY remains responsive to the business landscape across the whole of the UK.
“For example, our national tax intellectual property specialist Rob Peers and our national assurance data and analytics leader Gareth James are both based in Leeds.
“When it comes to recruiting talent we are really benefitting from the fact that Yorkshire is seen as an attractive place to live – Leeds’ vibrant arts scene is just one example of that.
“Our Hull office of course remains an important part of the Yorkshire team, led by Assurance Associate Partner Richard Frostick, and that city is continuing to benefit from the afterglow of being the Capital of Culture last year.”
The Yorkshire practice took on 42 graduates during the year, a 61 per cent increase on the previous year, and it welcomed 12 apprentices to EY’s Business Apprenticeship programme, which offers young people an alternative to university.
Suzanne Robinson said: “Apprenticeships are a vital alternative to the standard route into further education – this route provides the students with practical and theoretical experience without the burden of academic fees whilst also paying a salary.
“From EY’s perspective, we believe apprentices are key to our business, they help to drive creative thinking and bring us into the future of work.
“In a working world where past experience is requested for even entry level positions, we hope that offering this kind of opportunity will not only open doors for young people but also be a new way for us to discover and capture some of the best talent in the region, that might be missed through more traditional routes.”
EY ranks in the top 25 of Yorkshire’s Best Companies to Work For list. The inaugural regional rankings are an extension of the annual list Best Companies list published in The Sunday Times.
The list ranks Yorkshire companies based on the views and opinions of their employees, who are surveyed about their experience of their workplace environment, leadership, development opportunities, wellbeing, pay, benefits and a company’s commitment to ‘giving something back’.
Suzanne Robinson said: “I’m proud that EY features in the Yorkshire and Humber Best Companies to Work For list – recognising the investments we are making to promote a culture of diversity and inclusiveness. 93 per cent of people in our Leeds and Hull offices say that EY has created an inclusive environment where people with diverse backgrounds and experiences can succeed.”
EY made further investments in its enhanced high technology centres, creating two new Wavespaces, which are part of a global network of nearly 20 similar centres around the world. Located in Shoreditch in London, and Edinburgh, they work closely with the advanced customer design centre – EY-Seren.
EY recognises the need to continue to invest significantly in its business and people to improve audit quality and is committed to doing that. While standards need to improve across the profession, it is important to note that EY has not been fined by the Financial Reporting Council (FRC) for audit work completed in the last five years, nor have any of its partners been sanctioned in respect to that period.
Steve Varley, EY’s UK chairman, said: “We remain focused on the quality of our audit work and we also welcome the recently announced market study by the Competition and Markets Authority.
“This study, together with Sir John Kingman’s review and the FRC’s work on corporate reporting, presents a golden opportunity to examine the role of audit and to reinforce the focus of auditors and company directors on audit quality.
“We were disappointed that our latest audit inspection results from the FRC declined from last year. 82 per cent of our FTSE 350 audits required ‘no more than limited improvements’ compared to 92 per cent in 2017– based on the FRC’s categories for audit quality. Encouragingly, the regulator said there were improvements in all of the areas it identified the previous year.
“We will continue our investment in even better technology and training for our people and further strengthened our long term Audit Quality Programme which started in 2014 to challenge and guide our teams.
“We are also proud to be playing a central role in the Embankment Project, working with the Coalition for Inclusive Capitalism and over 30 leading companies including Unilever, Blackstone and JP Morgan to measure and communicate the long term value they create for their stakeholders. The results of this unique market-led initiative are due to be announced next month in Washington DC.”
EY employs more than 14,500 people across 23 offices in the UK, and a network of 150 countries and 260,000 people around the world. This investment helps EY to serve 23,000 UK clients, both large and small, supporting economic growth across the country and helping to deliver on our purpose of Building a better working world.