Grant Thornton UK LLP has reported a slight fall in fee income for year end 2020, with revenues of £471m, down 2.5% from £483m on the previous year as partner profit rose
Despite the challenges of the Covid-19 pandemic, the firm improved its profitability to 14% with trading profit of £57m, down from £63m for year end 2019.
Partner profitability also improved substantially. Average profit per member was £388,000, up significantly from 2019 when partners earned £332,000.
In June 2020, Grant Thornton sold its wealth advisory business to 1825, Standard Life Aberdeen’s wholly owned financial planning and advice business. During the year an additional £3m of consideration that was contingent on performance in 2020 has been earned and recognised, along with the release of a provision for costs of £0.2m.
The improved profitability has been driven by a combination of increased service line margin following changes implemented in 2019 and overhead reduction. The overhead reductions reflect a combination of the benefit of the structural changes implemented in 2019 enhanced by the impact of Covid-19.
The 2020 trading year can be split into three distinct portions, Grant Thornton stated in the annual report. The first quarter trading was strong but following the UK national lockdown at the end of the quarter the second quarter was significantly slower. The second half of the year showed year on year income growth and significant profit growth. These positive second half trends continue into Q1 of 2021.
Audit income was £137.9m, while tax income was £77m, deals and business consulting £98m and large and complex advisory work was worth £135.5m. Grant Thornton changed its financial year in 2019, making comparison of year on year growth difficult.
At the outset of the global pandemic, Grant Thornton focused on supporting its people, clients, operations and the communities in which it operates. This resulted in the firm making adjustments to its earlier forecasts and some of its operations.
The firm did not make use of the government’s furlough scheme but asked some of its people to temporarily reduce their contractual hours and pay over the early summer months. However, the firm’s strong performance enabled it to repay those individuals in full for any missed salary at the end of 2020.
Continuing its commitment to its people in 2021, the firm has recently given all its 4,500 people two ‘wellbeing days’ (over and above their normal holiday entitlement), invested in a wellbeing programme (aimed at connecting colleagues and supporting them with their mental, physical and financial health) and awarded all employees a minimum of £750 in bonuses for their 2020 contributions, along with other benefits introduced to ease pressure on staff during the pandemic.
Dave Dunckley, CEO of Grant Thornton UK LLP, said: ‘Our principal focus in 2020 has been to support our people by providing a safe environment for them to serve our clients and support one another, friends and families. This has enabled us to deliver the highest possible level of client service across the firm, which in turn has delivered a solid set of results for our business, the benefits of which we have shared with our people.
‘We started 2020 with strong foundations and despite the pandemic we entered 2021 in an even stronger position.’
In 2020, the firm appointed 13 new members to the partnership and over 300 graduates and school leavers. Throughout the year, the firm progressed in its commitment to diversity and inclusion, with the majority of its trainees (53%) coming from non-selective state school backgrounds, nearly a third (31%) being from a minority ethnic background and almost half (48%) were female.
Grant Thornton was ranked second overall in the annual Social Mobility Employers Index 2020, a leading authority on employer best practice. The firm has consistently featured within the top 10 in this index since its inaugural report in 2017, where Grant Thornton ranked first.
Dunckley added: ‘Whilst 2020 was a year no one will soon forget, we recognised that we also needed to keep an eye on the future and continued to invest in our talent pipeline. We know that having teams comprised of diverse backgrounds leads to better client outcomes, and this is something we’re firmly committed to.
‘The launch of our Inclusion Advisory Board last year was an important step in ensuring the decisions we take as a leadership team are informed by the range of views and backgrounds of our people.’