E&Y rocked by slide in profits

PARTNERS’ profits at Ernst & Young fell last year as the accountancy firm invested heavily to close the gap on its rivals.

The smallest of the “Big Four”, its average profit per partner fell from £737,000 to £678,000. This compared with £883,000 at Deloitte, £777,000 at PricewaterhouseCoopers and £671,000 at KPMG.

The highest paid partner was EMEA chairman Mark Otty, who took home £2m, according to the company’s latest report filed at Companies House.

An Ernst & Young spokesman said: “We invested at the bottom of the downturn in graduates, new partners, staff, new services and other resources, in order to ensure that we were fit for the upturn.”

The spokesman added: “We felt that this was the right thing to do and our partners supported that.”

Ernst & Young took the City by surprise last September when its UK revenues grew to £1.38bn, a 7.9 per cent gain on the previous year. The result outpaced its rivals as Deloitte recorded a two per cent fall and PricewaterhouseCoopers could only manage a one per cent increase.

The advisory arm for Ernst & Young, which does actuarial and performance improvement work, recorded a 16.3 per cent rise to £342m.

The spokesman for Ernst & Young said: “We continue to make the necessary investments for our long term growth. In Advisory we have ambitions to double our revenues and to recruit around 1000 people across the UK & Ireland.”