Annual report 2016

Grant Thornton continues its progress against Vision 2020 goals

Leading business and financial adviser Grant Thornton UK LLP has continued to deliver against its Vision 2020 strategy. The firm's financial results for the year ending 30 June 2016 show a 2.5%[1] increase in revenue to £534m for the year, along with continued investment in its programmes, processes and people to further enable Grant Thornton to become the 'go-to firm for growth'. 

Key information:

  • Revenue increase to £534m; underlying revenue growth on a like for like basis was 6.6%
  • Profit before tax of £72m
  • Average distributable profit per partner of £344,000 

Commenting on the results, CEO Sacha Romanovitch said: "Following my appointment we set a bold strategic agenda anchored in our purpose of helping to shape a vibrant economy, grounded in the belief that business thrives when they fully contribute to the system on which their sustainable growth depends. The energy and passion of our people, the support from our clients, challenge and insight from our wider stakeholders have all played a vital part in this first year of delivering on our agenda. 

"Over that past year, we have made significant strides in playing our part in shaping a vibrant economy. We continue to ensure that quality, excellence and ethics are at the heart of what we do and delivered against the goals we set out for ourselves last year; making substantive progress across each area of our strategy. 

Programmes to support a vibrant UK economy:

"This year saw significant momentum in our programme of work which leads UK thinking and solutions in key areas where a vibrant economy can be developed. This includes: the first of our city inquiries, in Sheffield; the first of our thematic inquiries on Housing in London and our Faces of a Vibrant Economy launch, amongst other initiatives. Each element has shown the power of convening people around a focused agenda to share ideas, resources and capability to create action. 

"Next year we will be building on this platform to focus our work and to draw out and amplify insights from the programme via our Vibrant Economy Commission, city inquiries in key regions and in-depth inquiries into key themes that are critical to the future of the UK's place in a global economy. 

"This year we have also delivered on four key programmes to ramp up our ability to help our clients to seize opportunities:

  • Insights and analytics: we have rationalised all our research and analytics capability to create more value for clients. Through strategic partnerships we have been able to bring together unique data sets to inform better decision making. A great example of this is our partnership with CIPFA which now provides CFOs with data about spend and place on a subscription basis. 
  • Increasing international connectivity: as a leading firm in the Grant Thornton global network, we have invested this year in building stronger capability in key trading routes, particularly between the UK and US. We have also further developed our support for business inbound to the UK. 
  • Strategic accounts focus: this year we have focused on key strategic accounts where we believe there is most mutual benefit to working in a long-term strategic partnership together. This has resulted in a 13% increase in activity with these clients as we become more finely attuned to how we can develop our capabilities to meet their emerging strategic needs. 
  • Innovation and Enterprise teams: this year we have learned how best to organise ourselves to have our 'laboratory' and 'greenhouse' working effectively to develop new ideas into profitable streams of business creating value for our clients. Specific areas of success this year have been the continued investment in growth services – we now have a full offer of services tailored to clients at different stages of their growth journey  from Geniac, our offer to startup businesses, G, a new offer to provide insights and coaching to accelerate early stage growth through to Growth 365, a community of like-minded, fast growth entrepreneurs who start their journey with an in depth growth diagnostic to support them in furthering their growth ambitions.

Processes - driving quality and excellence:

"With the introduction of the new Ethical Standard we have appointed a new leader of Quality, Ethics and Excellence. He will focus on ensuring that quality continues to be part of our DNA. Our ongoing investment in the audit quality programme continues with our new global audit software and methodology due to come on stream in 2017. This will streamline our approach, make a much clearer link between our testing and International Auditing Standards and make it easier to evidence discussions and review. 

"We have also invested in our take on processes, centralising core aspects which also make our international conflict checking more efficient.

People - Building an innovation culture that creates value:

"This year has been one of much change - as we seek to create a real shift in ownership and responsibility. We have made big investments in people this year – appointing 30 new partners, 19 of whom are internal promotions. We have invested over £17m in new people, promotions and increases for our people, building capacity for continued growth. 

"At the same time we have reduced our voluntary employee turnover to 18% - simply we have got better at keeping our most talented people within the firm. We have also relaunched our Alumni Network to reconnect with former colleagues. 

"We have also continued our commitment to building a more diverse team – particularly in the area of social diversity. We were a bold first mover in changing our entry requirements for new trainees. Two years on this has significantly impacted the makeup of our intake – over 21% would not have met our previous criteria – and this more diverse intake is performing well in role. We have had great external validation on our processes from The Bridge Group who have affirmed that our processes are among the least likely to disadvantage people of any they have seen.

Shared enterprise

"This simple idea of unleashing the potential of over 4,500 people through sharing ideas, sharing responsibility and sharing reward has drawn considerable attention. This year we have been experimenting with and embedding new ways of working, building on the foundations of the coaching culture we have been laying for some years now. Our sharing ideas bursts over the first half of the year confirmed what we knew – we have smart people with great ideas aching to have a space for them to grow. Over 1,500 people came together face to face; and we experienced more than 100,000 individual hits to our online platform. Numerous individual ideas were developed and implemented locally and some bigger ideas are being developed at a firm wide level. 

"As we head into the new year our focus is turning to sharing responsibility – this is now fully integrated into our refreshed Code of Conduct and Quality, Ethics and Excellence agenda. A key element of this is how our monitoring and control becomes even more embedded in self-correcting systems, where key metrics on compliance are shared openly throughout the firm to enable individuals to drive improvement in their areas. 

"As to shared reward, in addition to our investment in salaries and bonuses for our people, £2m has been added to our shared reward pool which runs in this first period to June 2018.

Outlook for 2017 and beyond

"What seemed important pre Brexit now seems critical in a post Brexit world. Undoubtedly there are uncertainties that will be reflected in businesses' appetite to progress their investment and growth plans. We are committed to delivering long term sustainable profits and this year we will continue to make key investments to set us up to do just that. Our focus will be around the following priority areas:

  • continuing our programme of work on the vibrant economy agenda – and drawing out insights for us to work with and create more value with the dynamic client base we wish to continue to build
  • building our capabilities in the key areas outlined earlier to enable us to meet the needs of our clients both now and in the future
  • developing our client experience so that we sustain and build on what we do well and continue to adjust how we work so that it creates most value for our clients
  • embedding shared enterprise further into how we work and developing the leaders who are able to create the environment where people are able to innovate and deliver their best work
  • driving our quality and excellence agenda, with the roll out of our new audit tool and methodology alongside other system improvements to make it easier for us to do great quality work
  • streamlining our business model and systems further, including investment in a new finance system to give everyone in the firm better information on which to make decisions.

"We expect that this focus will lead to sustainable improvements in profitability in line with our Vision 2020 plans."

[1] During this period, the firm continued to grow its revenues despite the absence of income from the Individual Voluntary Arrangement (IVA) business. As signalled in last year’s financial statements, the firm transferred its IVA business to a new entity, Aperture (NI) LLP (Aperture), retaining a 40% stake, with management having the controlling stake. Underlying revenue growth on a like for like basis was 6.6%.