Deloitte’s profits flatline after six month ban from UK government contracts

Deloitte’s profits flatlined last year as the accountancy firm navigated a six-month ban from pitching for UK government contracts.

The figures

Revenue for the year ended 31 May rose 11.2 per cent to £3.4bn, with consultancy revenue up 13.6 per cent to £859m and revenue from Deloitte’s audit and risk advisory business up 13.1 per cent to £932m. Revenue from the firm’s tax arm rose 5.7 per cent to £691m.

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Distributable profits for the year were flat at £608m, which the company said was due to increased investment into its staff. It hired 1,600 school leavers, interns and graduates over the period.

Why it’s interesting

Deloitte was hit with a six-month ban on bidding for government consultancy contracts last year, and was only allowed to start pitching for the lucrative work again in July. It was banned after it leaked a memo criticising ministers’ Brexit plans, putting five per cent of its UK revenues at risk.

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However, the firm did win several major audits over the year, including BAE Systems, BP, Centrica and GlaxoSmithKline, bringing is percentage of the FTSE 100 audit market to 26 per cent.

What Deloitte said

David Sproul, senior partner and chief executive of Deloitte, said: “This is a good performance in a complex and uncertain market which has been impacted by Brexit and the elections in the US and UK. Our consulting and audit and risk advisory businesses both grew by double-digits.

“Consulting has continued to see significant demand for technology-enabled business transformation and there has been further strong growth in Deloitte Digital, our creative digital consultancy.”