Deloitte UK: Profit stalls as partners pocket £1m

Revenue at Deloitte UK increased slightly by over two per but against the backdrop of its profit stalling in a challenging market.

The firm revealed that its revenue for the year ended 31 May 2024 increased by 2.4 per cent to £5.7bn, with its tax and legal business generating the largest growth for the firm, at three per cent.

The firm reported that its distributable operating profit was “in line with last year” at £756m, a stall after it generated six per cent the previous year.

In addition, the average profit per equity partner (PEP) at Deloitte UK dropped by 5.2 per cent to £1.01m, from £1.06m in the previous year.

Its consultancy arm’s revenues dropped by one per cent from £1.6bn in the last financial year to £1.58bn, which the firm stated it reflected “more cautious investment in services in light of economic conditions.”

Its financial advisory business faced a challenging market, particularly in forensic and M&A advisory, as revenues dropped by two per cent from £669m in the financial year for 2023 to £653m.

The firm noted that in response to a challenging market, it “had to take the difficult decision of making a number of targeted redundancies early in the year”.

Despite that, it has also hired in areas of growth with 3,387 new staff, and a number of promotions including 80 to partnership level.

It revealed that it invested over £263m in salary increases and bonus payments, as well as nearly £63m in learning and development, up from £53.9m in 2023.

It was reported earlier this month that Deloitte was the first Big Four firms to have equalised paid parenting leave in the UK with a new policy that will allows all parents to be eligible for 26 weeks on full pay.

Commenting on the results, Richard Houston, Deloitte UK senior partner and chief executive, said: “Like many businesses, we had to carefully consider our cost base and make some difficult choices this year.”

“The UK economic outlook has been improving in the last 12 months. A recovering economy, alongside the government’s commitment to work with business in tackling economic and technological challenges, offers the prospect of stronger growth to come,” he added.

These sets of results come on the back of fellow Big Four firm PwC UK, which also reported single-digit growth in revenue, however, this was against the backdrop of the group’s profit falling.