Deloitte in the UK reported further strong growth for the year ended 31 May 2006. Revenues grew by 15.0% to £1559m and total profits available for allocation to partners and to cover retired partner annuities grew by 8.7% to £489.2m.

John Connolly, Deloitte’s Senior Partner and Chief Executive commented:

Revenues

“Each of our four divisions performed well in an environment which remained reasonably buoyant and where our decision to continue investing in increased professional headcount and our unrelenting emphasis on quality was rewarded.

“Our unique range of skills in depth across each division and our continued interest across all client segments – government and public sector, major corporates and private companies – brought an interesting flow of new clients and engagements into our firm. The ‘hot’ M&A market, the growing importance of London as a centre of professional expertise and the continuing focus of companies on governance, risk and compliance all created quality business opportunities across our divisions.

“In Audit our market share in the FTSE100 and FTSE250 continues to grow, and at 23% is now second largest in the UK. Recently, FTSE100 company Scottish Power announced Deloitte as their newly selected Auditor. Growth sources included IFRS conversion advice, preparation for Sarbanes-Oxley, transaction support and particularly Technology Risk Services where growth exceeded 30%.

“Our Tax division grew more strongly this year in what is still a very challenging environment.  Our leading position in Private Equity and Corporate M&A provided particular growth opportunity.  Our specialist teams in Real Estate and International Tax were very active, influenced respectively by significant inflows of capital and the upcoming REIT legislation and many UK companies refocusing on international growth and the tax efficacy of their global operations.

“Our Consulting business goes from strength to strength and we are now recognised as the market’s leading business consultancy.  We are building on a strong balanced portfolio across government and private sector and seeing a continuing demand for multi disciplinary business drawing upon our specialist skills in strategy, operations, technology and human capital.

“Our overall growth rate in Corporate Finance reflects a particularly high growth in M&A advice and transaction support, recognising the market strength, but also our range of skills across commercial, operational and integrity due diligence, post merger integration, sale and purchase agreement advice and debt advisory services.  We experienced low growth in Reorganisation Services and Insolvency related work impacted by what was a robust economic environment.

Profits

“Each of our divisions delivered very satisfactory profitability producing profit before tax of £460.9m (growth of 9.1%) and a total profit for allocation to partners and for annuities to retired partners of £489.2m (growth 8.7%).

Profit Per Partner

• Average profit per partner £765,000 (2005: £711,000)
• Total profit shares of key management personnel (The Executive) was £27.9m (2005: £24.3m)
• Profit share of Senior Partner and CEO £4,166,400 (2005: £3,632,600)

Building our Resource

“The quality of our people will continue to be our key differentiator.  At 31 May 2006 we had 8812 fee earning professional staff and partners, an increase of 12.8% over the year before.  The increased cost of our fee earning staff was 15.6%.  On 1 June 2006, we promoted 38 new partners, 12 new principals and 136 new directors.  In addition, we hired 23 new partners from outside of the firm during the year and have a further 20 in the pipeline set to join us in the next few months.

“External recognition of our achievements include being placed in second position in The Times 100 Graduate Employers Survey this year and in seventh position in The Sunday Times Best Big Companies to Work For in 2006.  Our own Annual People Survey showed commitment increased to record levels.

“Our people continue to contribute extensively to the wider community and through the Deloitte Foundation we are leading two new community initiatives that will support the disabled in sport and build employability skills for young people.

Looking Ahead

“The markets will be tougher in the year ahead.  The complex interaction of the turmoil in the Middle East, oil prices, fear of inflation, a slowing US economy and now the recent UK interest rate increase impact corporate confidence and there is already evidence of this.

“In Deloitte, we will continue to pursue the objective of providing exceptional service to our clients and we will focus our services on the key challenges they face including:  Financial reporting and delivering shareholder value; Compliance, risk and regulation; Globalisation; Demographic challenge and the talent agenda; Industry consolidation and Performance optimisation through alternative business models.

“We have reshaped our leadership to meet the market challenges ahead and our continued investment in quality and people is an indication of the confidence we have that we will continue to be successful.  In the first two months of the new year, business levels were very good.”

Ends

About Deloitte

In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.  The information contained in this press release is correct at the time of going to press.

Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.

The information contained in this press release is correct at the time of going to press.