Deloitte revenue leaps with 17%

Date: 28-05-2008
Source: Financial Times

Accounting and consulting major Deloitte will this week report a 17% jump in revenues over the past year, in a clear sign that the credit crunch has failed to dent the top end of the professional services market.

The industry, dominated by the "Big Four" of Deloitte, PwC, KPMG and Ernst & Young, is often considered a mirror for the broader business environment. The fortunes of the world's four top auditors are closely linked to those of their clients, who represent the world's biggest companies and industries.

James Quigley, global chief executive of Deloitte, said the firm would report global revenues "north of $27bn" for the 12 months to May 31 - a 16.9% jump from last year's $23.1bn.

Although the weakness of the dollar had flattered the numbers, Mr Quigley said the results would still show double-digit growth in local currency terms.

"There's no question that the credit crunch is having some impact and as that slows the rate of expansion our clients experience, it will temper our growth a bit," said Mr Quigley in an interview with the Financial Times.

But he added that the slowdowns in some areas were balanced by faster growth elsewhere, notably from leading emerging market economies such as Brazil, Russia, India and China.

"Even though there is a bit of a correction going on, there's real liquidity in those centres and there is a need for services such as ours," he said.

Applying Deloitte's growth rate to its rivals would give the Big Four worldwide revenues in excess of $100bn, for the first time. Deloitte, the second-biggest of the group after PwC, will only reveal its full numbers in the summer, but still ahead of the others who have later year-end dates.

The firms earn about half their income from auditrelated work, which is considered the core of their business. Other services, such as advising on corporate transactions and offering tax advisory services, are smaller units, but have grown much more quickly in the past few years.

Europe and the US have traditionally provided the bulk of the revenues - more than 80 per cent for all four - but the fastest growth is now coming from Asia.

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