EY warns UK staff of possible decline in profits-per-partner

Big-four accountancy firm EY has reportedly warned 1,700 of its UK partners that its profit-per-partner could drop by as much as 15% in its financial year to the end of June amid a market slowdown, according to Sky News. 

The outlet said the warning was made by Stuart Gregory, a senior figure in EY’s finance and transformation team during a presentation given last week.  

Last year, EY reported average distributable profit per partner of £761,000 – down from a record £803,000 the year before.

Insiders within the company, however, told Sky that his remarks “did not equate to a profit forecast” and that trading had been “robust” throughout the first half of the company’s final quarter, with a “solid pipeline of business” expected over the next 10 weeks.

One source stated that EY is still expecting to record “a solid performance for this financial year”.

The news comes months after EY shelved its plans to split its audit and consulting operations due to objections in several global locations.

Furthermore, industry sources reported on Thursday (18 April) that the private equity firm CVC Capital Partners had written to EY’s Italian division in recent weeks, expressing interest in purchasing the company’s strategy and consulting division.

While no formal talks are in progress it is estimated that any approach would value the company at more than €500m.

EY declined to comment on the points raised about UK partner pay. However, on the topic of CVC, EY told Retail Sector: “Like other high-performing businesses, we frequently receive inquiries from private equity firms and other investors expressing interest in parts of EY businesses. The CVC approach was a preliminary expression of interest. 

“As part of our global strategy we continue to evaluate our strategic opportunities and will only entertain transactions at the right time and after careful consideration. There are no plans to sell any part of our business at this time.”