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Deloitte’s UK and Swiss practice has warned that conditions in the UK will continue to be “challenging” this year, despite partners at the Big Four accountancy firm earning on average more than £1m for the third consecutive year.
Deloitte said partner pay was the same as last year at £1.06m, due to an increase in the number of partners sharing in the firm’s profits. The number of partners increased from 672 to 714. Deloitte added that distributable operating profit rose 6% to 756 million pounds in the year to May 31, while revenue rose 14% to 5.6 billion pounds.
Deloitte was one of the only Big Four accounting firms – which also includes Ernst & Young, KPMG and PwC – to report average profits per partner above £1m in its latest UK results. Taking into account the one-off average gain of £200,000 per partner from the sale of the restructuring business to private equity-backed professional services group Teneo, Deloitte’s 2021 figure also reached around £1m.
Richard Huston, chief executive of Deloitte’s UK and Swiss operations, said results in the first half of the financial year were “strong” but there was some “softness” in the second half. The company said revenue growth in the second half was about 9%.
However, Houston warned that the year ending May 31, 2024 could be more difficult.
Referring to the company’s plans to cut 800 consulting jobs in the UK, announced earlier this month, Houston said: “The market is expected to remain challenging and, like any responsible business, we have adapted our plans to deal with the situation. .”
He added: “The UK faces a challenging year, with continued cost of living concerns, slow economic growth, rising geopolitical tensions and the climate crisis”.
Ernst & Young and KPMG have also announced some job cuts this year.
Deloitte’s UK and Swiss practice is part of Deloitte’s Northern and Southern Europe practice, which covers much of Europe and the Middle East. Under UK rules, the UK and Swiss units are obliged to disclose more information about their financial performance than other units in Deloitte’s global network.
Revenue in the UK will grow by 13% to £4.84 billion in 2022-23, while revenue in Switzerland will grow by 20% to £772 million.
From the perspective of the British industry, the core audit and assurance business has the strongest growth, with revenue growing by 20% to 869 million pounds. Consulting revenue grew 16% to £1.6bn.
Houston said the company’s financial services, energy and resources and public sector teams had all experienced “significant demand”.
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