“2017/18 was a year when we continued to evolve our business with significant changes in our leadership, our structure and how we face the market. This reshaping has inevitably impacted our year-end performance. We are confident that with our newly aligned market focus, our fantastic people and our powerful propositions we will accelerate key growth areas of the business, driving sustainable and profitable growth in the future.” Dave Dunckley, CEO, Grant Thornton UK LLP
Leading business and financial adviser Grant Thornton UK LLP today releases its annual report for year ended 30 June 2018. Whilst many areas of the business performed well -particularly the mid-market business – overall performance was below expectation.
The strongest growth during 2017/18 was in the mid-market, where our brand strength contributed to a good year - particularly in advisory. The deals business had a record year, with combined revenues up 30% on the prior year. Other areas seeing good levels of growth were Actuarial & Risk, Business Consulting and Business Risk Services with growth of 45%, 23% and 7% respectively.
The overall financial performance was impacted by a series of one-off portfolio disposals. In addition, several contracts came to an end in 2016/17 and, while planned, they were not replaced with similar work to meet all of the income they represented. These included the cessation of three large public service contracts, with a combined revenue of £20m, six small portfolio disposals (announced last year), and decisions taken about clients the firm no longer wishes to work with.
In addition, during the year it became clear that whilst Geniac, a platform to support back office functions for small businesses, had established a valuable technology offering, it was not attracting new clients at a sufficient rate. The firm took the difficult decision to cease its investment in Geniac, with a £2.1 million impairment in 2017/18.
This resulted in a performance which saw year-on-year revenues at Grant Thornton marginally fall - down 1.8% to £491m – with post-tax profits of £70M (2017: £75M). Average distributable profit per partner was £373,000.
Dave Dunckley continued:
“These 2017/18 results are below our expectations and, whilst there were many positives, we know we can drive improvement moving forward. In May, Grant Thornton restructured to be the only firm in the UK organised by the markets and clients it serves. This has allowed our people and business to have a laser focus on the needs of our clients. The benefits of this are already being felt in our business which sets us up well for the future.
“In addition we have a brand which has never been stronger. In 2017/18 we saw a 55% increase in our brand strength in terms of being seen as differentiated, meaningful and salient. Despite challenging circumstances, this demonstrates a sustained year-on-year reputation and credibility improvement with our target clients.
“Moving forward, we have unprecedented brand awareness, a business structured and focussed on the needs of clients and a strong purpose which is underpinned by the quality of our people and by our unique shared enterprise culture. With this combination, we will add value to clients, create opportunities for our people, deliver high quality work and achieve sustainable, profitable growth.”