Deloitte partners share £593m profit pool as consultancy revenues surge

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Partners at Deloitte, one of Britain’s biggest accountancy firms, will share a profit pool of £593m after a surge in revenues from its consultancy business.

The profits mean that 721 partners will receive an average payout of £822,000, up almost 10% from £750,000 last year. The increase in profits was driven by a 10.5% rise in consulting revenues, with the group’s core auditing practice growing by just 0.3%.

It is the first time in three years that Deloitte partners have enjoyed an increase in the payout, with accountancy firms under pressure from new regulations that force large companies to change their auditors more regularly.

The firm’s senior partner and chief executive, David Sproul, took home £2.8m, up from £2.6m last year, but well down on the £5.7m his predecessor John Connolly earned at the height of the boom in 2008. Back then, Deloitte’s 651 partners pocketed £970,000 each.

The mainstay of the firm’s consultancy work was provided by Tesco, after Britain’s biggest retailer uncovered an accounting scandal that led to the departure of several senior executives and sparked investigations by the Serious Fraud Office, the Financial Reporting Council and a grocery industry watchdog.

Tesco subsequently announced in May that Deloitte would become its new auditor, replacing PwC, which had held the role for 32 years. Deloitte declined to reveal how much Tesco had paid for the consultancy work.

Sproul said the last 12 months had been marked by improved economic conditions and stronger business confidence.

Deloitte also published its gender pay gap in the results, which stands at 17.8%. The firm said this was 1.3 points below the national average, and fell to 1.5 points when comparing male and female employees at the same grade.

“This illustrates that for Deloitte, the issue is far less about how we pay our people and more about the number of women employed at senior grades,” Sproul said.
“We are determined to improve the retention of women within our firm and our representation of women in senior positions.

“We have an ambition that 25% of our partners will be women by 2020, and in June we announced the promotion of 22 new female partners. We have also taken a number of steps to support these objectives, most recently introducing a return-to-work initiative designed to support women back into employment.

“We believe that without a representative share of senior female employees, average pay will never truly equalise. This is something we are working very hard to resolve.”

Deloitte’s results for the year to 31 May show total revenues rose 6.4% to £2.7bn, with profits up 7% to £593m. Sproul said, however, that there had been hesitation in the economy in the run-up to the general election in May and warned of further uncertainties.

“Concerns remain over fragility in the eurozone and turbulence in the Chinese economy, whilst the UK’s position in the EU must be resolved quickly to avoid it becoming a drag on business investment,” he said.

“However, our new financial year has started brightly and we are optimistic that overall, the outlook remains positive for the UK in an evolving global economy.”

Powered by Guardian.co.ukThis article was written by Graham Ruddick, for The Guardian on Monday 24th August 2015 00.01 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010

 

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