Deloitte UK reports 2022 financial results: Strong balanced growth and record investment in people and services 

Deloitte UK reports 2022 financial results: Strong balanced growth and record investment in people and services

• Revenue for the year ended 31 May 2022 increased by 10% to £4.9bn as resilient markets drive growth across Advisory and Audit & Assurance
• Distributable operating profit increased by 21% to £711m
• Record investments made in people, services and communities
• Growth and confidence drive a record number of 145 partner promotions

Andy Westbrook, Deloitte practice senior partner in the North West, said:

“It’s been yet another outstanding year for growth within our region, which is a direct result of all of the hard work and commitment of our people. There’s been double digit revenue growth, alongside

significant growth within our team and across all service-lines, particularly with the doubling of our Consulting North team three years ahead of schedule.

“With both the promotion of our talented people, along with us welcoming a whole new range of talent, there’s plenty to celebrate ahead of the move to our new office at 100 Embankment in Salford’s Greengate Square.”

Deloitte North West

We’ve continued to grow and invest in our dedicated team in the North West, with headcount now at 1,242 people. This represents a 13 per cent increase over the 15-month period starting May 2021 to present.

Notably, we’ve doubled the size of our Consulting North team in FY22, achieving headcount growth targets three years ahead of schedule. The North West has also had the biggest intake of graduates, placements, and apprentices through our BrightStart programme, with 222 people set to join the team by the end of 2022. The North West office has recently seen 326 promotions, with 8 promoted to Partner and 20 to Director.

In the past year we announced our plans for a new state-of-the-art office after signing a 10-year lease for 43,000 sq ft of space at 100 Embankment in Salford. The new office will help to accommodate our forecasted headcount of 1,875 in the North West by May 2025.

We’ve also continued our charity work throughout the region, announcing our newest partnerships with Manchester Youth Zone and the Hive Youth Zone in Birkenhead as part of our 5 Million Futures programme. Our partnerships will allow us to support MYZ and the Hive in creating safe spaces for children, giving them access to a wealth of sport, creative, education and employability skills.

  Richard Houston, Deloitte Senior Partner and CEO, said: 

“I’m proud of our people and partners whose commitment and skills have made this year’s performance possible. Demand for all our services was strong, particularly in cloud technology, digital transformation and M&A services.

“Our results have enabled us to make record investments – the highest in over a decade – in reward, promotions and skills. We enter the new financial year with momentum and are well placed to navigate the current economic headwinds.”

Financial performance

Resilient markets and corporate investment fuelled balanced growth across all our businesses, with revenue¹ for the year ended 31 May 2022 increasing by 10% to £4.9bn.

Our UK Advisory Businesses grew by 11%. Growth in Consulting was driven by demand across the private sector as it rebounded from the constraints of the pandemic. This included managing major programmes and delivering enterprise transformation – in particular providing skills and expertise in digital technology and ERP systems strategy and implementation. Risk Advisory grew in the priority areas of sustainability, CFO advisory, regulation, and digital security and risk.

On a like-for-like basis, Financial Advisory had an exceptional year driven by a buoyant M&A market, as we guided clients through pre and post deal activities, as well as an increased demand for our advice on financial crime, regulatory changes and specialist corporate finance activities. Tax & Legal continued the momentum from the second half of last year, recording healthy growth in the core tax advisory areas including transactions, transformation and resolution, in the tax compliance business and in the expanding legal business.

Our UK Audit and Assurance Business grew at 9%, while continuing to invest in audit quality, people, training and skills. This is a strong result in its first full year in an operational ring fence overseen by an independent Audit Governance Board.

Our distributable operating profit² for the year ended 31 May 2022 grew 21% to £711m, from £590m for the prior year, which was impacted by COVID-19. Bonuses for our people increased to a record level in line with profits, in addition to payments being made early.

Our total UK tax contribution was £1.5bn in the year ended 31 May 2022 (2021: £1.3bn) and consisted of £902m of taxes collected on behalf of HMRC (VAT, PAYE and employee national insurance) and £594m of taxes in relation to members’ income taxes, national insurance, corporation tax and employer’s national insurance. The effective UK tax rate for members was 55.4% (2021: 51.5%), with the increase primarily attributable to non-deductible costs associated with our property programme.

Investments in people, services and communities

Each year we invest significantly in our people, services and communities. Our robust financial performance in 2022 has driven record investment levels.

This year we welcomed more than 4,500 new colleagues. Additionally, we’re also taking on almost 2,500 graduates and apprentices across all regions and nations of the UK – a 67% increase from last year.

To attract and retain the best and brightest talent we have introduced a series of measures – in addition to our hybrid work model, where we trust our people to decide when and where they deliver their best work. This year we also introduced flexible bank holiday leave, and an overseas working policy where people who have the ‘right to work’ in another country can request to do so for 20 days a year. We also brought forward this year’s annual pay review by three months and invested £400m in salary increases and record level bonuses. Salary increases were focused on our junior grades, while starting salaries for all new graduates and apprentices rose.

Alongside this we invested over £30m in learning and development in FY22, including contributing to our new leadership centre in Europe – Deloitte University, opening in FY23.

We continued our multi-year investment in areas such as digital transformation (including Cloud technologies, SAP S4 and cyber), M&A (including our market leading integration and separation services), and ESG. Audit quality continues to be a priority for us, with significant investments in the development of audit processes and technology.

We’re committed to our presence in all the regions and nations of the UK. Over the year we established Northern Ireland’s largest AI and data practice, opened our first offices designed for hybrid working in Newcastle and signed a lease for one of the UK’s most sustainable office buildings in Bristol. During the year we held a conference on economic growth in Tees Valley and made our first steps to recruit in the area.

In FY22 we increased our investment in communities across the UK to £8m – comprising volunteering by our people, pro-bono projects, fundraising and charitable donations. We also launched Deloitte Digital Connect, a programme supporting 35 charities across the UK with their digital capability, and donated nearly 7,000 laptops to partner schools, charities and other organisations – including 1,000 to community groups supporting refugees.

Outlook

Richard Houston said: “Our business has consistently demonstrated both resilience and agility over recent years. We enter our new financial year with strong momentum and are confident in our investments and our talented people. However, for the first time in recent history, the UK is facing high inflation, and rising interest rates and costs. Our role is to help our clients, our people and our communities navigate these economic challenges while investing for the future through skills, innovation and digital adoption.”

Financial metrics

Revenue growth by Business

# At the end of May 2021, Deloitte sold its restructuring services business to Teneo.  Adjusting for this, Financial Advisory grew by 24% on a like-for-like basis.    

## Risk Advisory revenue growth was impacted by changes in billable third-party costs.  Underlying growth for the business was 8%.