Deloitte’s UK partners took home £1,058,000 on average this year thanks to booming activity in its mergers and acquisitions advisory business, but the Big Four auditor’s boss warned that it faced “economic headwinds”.

The figure topped last year’s payout by £8,000 but the 2021 result was boosted by the sale of a business. This time, the firm wrung 21 per cent more operating profit from a 10 per cent jump in revenues.

“Demand for all our services was strong, particularly in cloud technology, digital transformation and M&A services,” said Richard Houston, chief executive of Deloitte UK.

The deal boom made for an “exceptional” year in financial advice to companies, including pre- and post-M&A advice and work on corporate finance, Deloitte said. “We enter the new financial year with momentum and are well placed to navigate the current economic headwinds.”

However, Houston said the coming year looked less certain, noting that “for the first time in recent history, the UK is facing high inflation, and rising interest rates and costs”.

His comments follow a similar warning last month by PwC’s UK chair Kevin Ellis, who told partners at his firm that rising costs would bring down payouts in the coming year. Distributable profits to PwC’s UK partners averaged £1,025,000 this year, including £105,000 from the sale of a business.

At Deloitte, revenues at the financial advisory business jumped 24 per cent to £501mn for the year to the end of May, excluding the effect of last year’s sale of its restructuring business to Teneo. Overall, revenue in the UK advisory business — which also includes risk, tax and legal advice as well as general consulting — was 11 per cent higher at £3.6bn.

Revenue from the UK audit business rose 9 per cent to £723mn.

Deloitte has publicly committed to its business model of keeping consulting and audit work under the same roof, as rival EY prepares to poll partners on splitting the two.

Deloitte said its growth in the past year had been “balanced”. Consulting was driven by a rebound in corporate investment after the pandemic, while its risk advisory business was driven by companies’ need to deal with mounting environmental, social and governance concerns, as well as cyber security.

The total revenue for Deloitte’s UK and Swiss business, which are reported together, was a record £4.9bn, with distributable operating profit of £711mn, also a record. The firm has 672 equity partners.

Amid rising inflation and tougher competition for staff, the firm said it had raised salaries and bonuses in the past year, adding £400mn to its pay bill. It also brought forward its annual salary increases by three months.

It said 4,500 new people had joined the firm in the past year, and that it had promoted 124 people in the UK to partner at the start of the current fiscal year.


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