Ernst & Young UK records
growth of 9 percent

Ernst & Young UK (E&Y) has grown 9 percent to record
revenue of £1.2 billion ($2.4 billion) for the year ended 30 June
2007. The results indicate E&Y should remain the smallest of
the UK Big Four firms in terms of fee income. It is the third of
the large firms to report its annual results – in recent months
PricewaterhouseCoopers UK announced growth of 6 percent to record
turnover of £2.1 billion and Deloitte UK reported growth of 15.6
percent for revenue of £1.8 billion. KPMG UK is yet to release its
results, however it reported turnover of £1.5 billion for the year
ended September 2006.

E&Y’s growth rate was well down compared to the year ended
June 2006, when it recorded growth of 20 percent. This year it
reported that its revenue growth over the past three years stands
at close to 50 percent.

E&Y chairman Mark Otty said that for the past 12 months the
firm has “given a clear indication that our revenue growth in the
UK was going to be reduced from the Sarbanes-Oxley-inspired spike
of 2006”. He claimed: “The increase in our UK revenues of nearly 50
percent over the last three years outperforms those of our three
main rivals.”

The firm reported profits for the financial year increased by 7
percent to £328 million.

Otty said he was pleased with the “strong performance we achieved
in all parts of our business in the UK in 2007”. “Despite the
considerable investment we have made in recruiting a record number
of new staff and partners, our revenues and profits have held up
well,” he said. More than 3,000 people from 32 countries were
recruited for the UK firm during the year.

E&Y UK now has close to 10,000 people in the UK. There are
6,000 staff and partners in the London office, making it the
largest E&Y office globally. This autumn, the firm welcomed
more than 750 graduates.

The firm reports that it has the highest number of female partners
(15 percent) among its three major competitors and the
second-highest proportion of female qualified accountants at 40
percent.

Otty said that the assurance and advisory business services
practice “grew by a credible 8 percent in 2007, despite the decline
in work relating to International Financial Reporting Standards and
Sarbanes-Oxley compliance. In part, this was driven by a near 100
percent increase in revenues for our new business advisory services
group.”

The tax practice and transactions advisory service practice both
grew by 9 percent.

Otty said emerging markets and new services will drive growth for
2008. He commented: “The exceptional growth in the emerging markets
also underline that our strategy of twinning more mature markets
with those with great potential is already proving to be a
successful one.”

In summarising the background for E&Y’s performance during the
past year, Otty said: “London’s expanding role on the international
stage for financial services and capital market activity has
generated much opportunity for many of us working in this economy…
We have seen the UK becoming more and more integrated with a global
economy where traditional boundaries are fast disappearing. Whilst
economic growth and activity continue to be strong, as a business
we are faced with questions about issues such as climate
change.”