Partners at EY to expect a drop in their pay packet
EY, one of the Big Four firms, has been warned that profits could fall by 15 per cent this year due to a slowdown in the market.
According to Sky News, partners at EY have been warned by Stuart Gregory, a senior figure in EY’s finance and transformation team, that profit per partner may slip by 15 per cent for its financial year.
Last year, the firm recorded an average distributable profit per partner of £761,000 , down from a record £803,000 the year before. At the time, the firm stated that it “re-invested profits into the business, rather than just in partner distributions.”
After the firm ditched the plan, known as ‘Project Everest’ which would have saw the firm separate its consulting and audit divisions, EY’s UK bosses were reportedly discussing cost-cutting measures last year.
The firm took on $700m (£554.27m) in additional debts in its global operating business, which were largely spent on the failed plans to split the business.
As of the last financial report in October 2023, EY’s total partner population in the UK was 1701 people.
Last month, it was reported that over the last year, the growth of the UK’s consulting market slowed by over 10 per cent. The dull news for the sector isn’t over, as the report is expected to flatline this year.
Sky News also reports that sources have told them that EY’s Italian business had received a letter from CVC Capital Partners, the private equity firm, in recent weeks indicating an interest in acquiring its strategy and consulting arm in the country.
One insider suggested that the approach was likely to value the business at more than €500m, although they said no concrete negotiations were underway.
Commenting on this, a spokesperson for EY told City PM: “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,” they added.