Deloitte reports fastest revenue growth in 10 years
30 August 2016
Business advisory firm releases financial results for year ended 31 May 2016
- Group revenue up 11.2% to £3.1bn (2015: 5.6%)
- UK Group revenue up 13.6% to £3.04bn (2015: 6.2%)
- Distributable profit increases by 2.5% to £608m
- Average distributable profit per Equity Partner increases by 1.8% to £837k
- Double-digit growth is reported across all five business areas
- Firm invests in disruptive start-ups and support for social enterprises
- FY16 sees major change to student recruitment to ensure the firm’s talent pool is diverse and reflects the make-up of today’s society
- In 3 years Deloitte charity programme raises £2.65m for Alzheimer’s Society, Prostate Cancer UK and Mind, as well as providing 7,000 hours of pro bono support
- Partnership with British Olympic Association allows Deloitte to play a part in providing TeamGB with their success in Rio
Deloitte, the business advisory firm, has increased Group revenue by £313m in the year ended 31 May 2016, topping £3bn for the first time. UK Group revenue, representing the firm’s UK and Swiss operations, grew by 13.6% to £3.04bn. This is the sixth consecutive year of revenue growth and the fastest increase in 10 years.
David Sproul, Senior Partner and Chief Executive of Deloitte, commented: “This year we have seen double-digit growth across all business areas. We have had significant success in the audit market, with four wins in the FTSE 100, taking our market share to 23%. It has also been a strong year for our advisory businesses, given high levels of demand for our M&A, risk management and regulatory, international tax and compliance services. We’ve also had high demand for our business transformation capabilities using technologies such as digital, cloud and analytics. In our international markets the firm’s Swiss Practice has grown significantly, at 26%.
“From an industry perspective, growth was most notable in health and life sciences, financial services, manufacturing and technology, media and telecommunications. Our global, private and national sectors all performed well, demonstrating our ability to serve a range of different demands and requirements.”
Profit distributable to partners for 2016 was £608m, compared to £593m in 2015. The average profit earned by each equity partner in the year, based on the firm’s distributable profit, was £837,000, compared with £822,000 in FY15.
David Sproul continued: “We have unparalleled breadth and depth of services and I’m proud of the many things we’ve achieved in FY16. Our results are testament to our ongoing commitment to innovation, adapting to new and changing markets and attracting and retaining the best talent. The Brexit vote introduces new challenges; we are confident in our ability to navigate this time of upheaval.”
Investing in innovation and inclusive growth
In the past year Deloitte has invested in more than 30 disruptive start-ups - 20 of which were developed by Deloitte’s own people. This includes the launch of Propel by Deloitte, a cloud-based accounting and analytics service to help fast growing SMEs and start-ups grow. The firm funded Propel by Deloitte through its £25m Innovation Investments scheme, which encourages employees to turn start-up ideas into business, and helps embed a culture of innovation in the firm.
David Sproul commented: “We’ve invested in developing our capability across emerging business disruptors, such as blockchain, crowdsourcing and robotics, working to ensure we can help our clients position their businesses for future growth.
“But if such growth is to be sustainable, it must also be inclusive - providing equality of opportunity for all parts of society. Our work with our National Charity Partners and social enterprises has demonstrated that by providing support that goes beyond just raising money, business can play a vital role in helping them grow their organisations in a robust and durable way. Our work with 11 social businesses helped to get over 1,900 people into employment and increase the employability skills of more than 12,000 disadvantaged people.”
Social mobility and diversity
Deloitte is working hard to ensure the firm’s talent pool is diverse and reflects the make-up of today’s society. The firm continues to be one of the largest recruiters in the UK, with 1,100 graduates, 200 school leavers and close to 3,000 external hires joining this year. In FY16 Deloitte announced major changes to the firms’ student recruitment process, introducing academic institution blind recruitment and academic contextualisation (the largest British business to adopt this); both of these measures were designed to ensure that Deloitte is better able to spot potential, regardless of background of the applicant.
Deloitte was also one of the first firms to report its gender pay gap, which stands at 16.8% this year, compared to 17.8% in FY15, and the national average of 19.2%. The firm’s aspiration is that 25% of Partners will be women by 2020 and this year 24 women were promoted to Partner (30% of the total partner promotions), bringing the percentage of female partners to 17.6% overall.
David Sproul said: “Gender diversity is a priority for our firm and I’m pleased that we’ve made good progress in FY16 on ways to attract, retain and develop female staff. Our use of concrete data to inform our gender-equality strategy was recognised by the United Nations this year and we were the first business advisory firm to launch a Return to Work programme, aimed at helping women who’ve been out of the workforce for an extended period to return to a career.”
David Sproul said: “The early economic indicators suggest the uncertainty created by the Brexit vote will lead to a slowdown in the second half of this year. However, UK businesses are both adaptable and resourceful and the UK remains in the top tier of the world’s most competitive economies, benefitting from strong institutions and a highly-skilled workforce.
“Our CFO survey showed business seeks clarity from government over the negotiations with the EU. The government must recognise that further restricting skilled migrants could be detrimental to the UK’s ability to attract global investment and the diverse pool of international talent that has supported our country’s growth. Rights of EU migrants should be protected and any future migration policies should respond to our economic needs rather than be overly focused on total numbers. This is whilst recognising the need for politicians and business leaders to make the economic case for immigration more clearly.
“Business must now work with government to set a vision for a post-EU environment that is open, pro-growth and, crucially, delivers prosperity and opportunity for all.”
1 UK group revenue represents revenue of the Group’s UK and Swiss operations (and excludes revenue of the CIS, and Financial Advisory’s Middle East operations)
2 Distributable profit differs from profit for the year as reported in the firm’s statutory financial statements as a consequence of, among other things, the treatment of equity partner annuities. Average profit per equity partner is based on distributable profit
3 Growth ranged from 10% in Consulting (£687m in 2015 to £756m in 2016), 11% in Tax (£590m in 2015 to £654m in 2016) and 11% in Financial Advisory £475m (£428m in 2015 to £475m in 2016) to 16% in Audit & Risk Advisory (£708m in 2015 to £824m in 2016). The firm’s Swiss operations grew 26% to £335m (£267m in 2015; or 23% in local currency terms from CHF401m to CHF493).
4 Deloitte has been providing programme management services to the BOA, supporting Team GB in Rio
5 Computed on an underlying basis (excluding the impact of acquisitions and mergers)
Notes to editors
Deloitte employs 16,006 people in the UK and Switzerland - up from 14,461 last year. Deloitte has 726 equity partners in the UK and Switzerland - up from 721 in FY15.
Deloitte has been working with the British Olympic Association since 2014, providing Team GB with the best possible platform for success in Rio through rigorous preparation. Post-Games, our work will help the BOA become financially sustainable and competitive ahead of Pyeongchang 2018, Tokyo 2022 and beyond. Read about the impact our secondees have had.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
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The information contained in this press release is correct at the time of going to press.
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