Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Payouts for UK partners at Grant Thornton rose by 11 per cent to an average of £644,000 last year despite a slowdown in growth at the mid-tier accounting firm.
The firm posted a 7 per cent increase in net revenues to £654mn in 2023, compared with growth of 12 per cent during the previous year.
Operating profit was up by nearly a fifth to £146mn, but the firm said this was driven by “one-off property related income”.
Grant Thornton attained “modest” growth in its advisory and tax divisions, and said it had made “significant gains” in its audit arm where sales jumped 16 per cent to £213mn during the period.
The overall slowdown in growth came against a backdrop of a tougher economic environment and a decline in dealmaking, which has hit demand for some services at accounting and consulting firms across the sector.
Malcolm Gomersall, Grant Thornton’s new chief executive, said: “Whilst uncertainty, inflationary pressures and overall trading conditions continued to impact our markets, our firm’s resilience meant we were able to continue investing in our people and operations.”
The firm said it had allocated £11mn for salary increases and 15 per cent of trading profits for discretionary bonuses during the year.
Gomersall, who previously served as the firm’s chief operating officer, only took the reins at Grant Thornton in January following the surprise departure of David Dunckley.
Under Dunckley, Grant Thornton moved away from auditing “public interest entity” companies — such as most listed businesses, banks and insurers — in order to reduce its exposure to high-risk clients. As a result, Grant Thornton was demoted last year from the UK regulator’s top tier of audit supervision.
The firm, which employs around 5,500 staff in the UK, has been fined more than £4mn since 2021 by the accounting watchdog for failings in its audits of café chain Patisserie Valerie, retailer Sports Direct and outsourcer Interserve. In 2022, the administrators of Patisserie Valerie also settled a £200mn lawsuit with the firm that alleged negligence in its audits of the café chain.
The Financial Reporting Council has since said that Grant Thornton’s audit quality has improved.
The rise in average partner pay to £644,000 puts Grant Thornton ahead of mid-tier rival BDO, which handed its partners an average of £609,000 last year.
Earlier this month, the Financial Times revealed that Grant Thornton’s US firm had agreed to sell a majority stake to the investment group New Mountain Capital, marking the latest private equity deal in the sector.