Kevin Ellis, Chairman and senior partner
The year in review
Welcome to our FY17 Annual Report which once again we are releasing in a digital format.
In commenting on our performance in FY17 I think it’s necessary to acknowledge the extraordinary events that took place in the year - the fallout from the vote to leave the EU and the subsequent triggering of Article 50, the US Presidential election and June’s unexpected general election.
The effects of these are still being felt by the UK, by our clients and our firm.
While our performance over the year was solid, the external uncertainty and volatility had an impact on our trading and the first half of the year was significantly slower than the same period in the previous year.
Professional services are a good barometer of business sentiment and we found that our clients were delaying decisions while they waited for greater economic clarity.
Our strategy in action
Over the year we rolled out our refreshed strategy to our people, which has our Purpose at its core.
This Purpose - to build trust and solve important problems - guides our interactions with our clients, our people and communities in which we live and work.
We also refreshed the values that underpin our culture.
In these uncertain times ensuring that our work is grounded in our purpose and underpinned by a strong and positive culture is vital.
Our strategy sets out our vision to be the leading firm - as well as our priorities to be technology enabled, deliver client excellence and empower our people.
Economic and technological changes have, and will continue, to impact the way we work and live. Professional services are no exception to this.
To stay relevant and continue to be the firm of choice for our clients, we have to adapt our business model and develop and invest in new products.
Only by doing this will we build a sustainable, profitable organisation that can continue to grow, pay taxes, create jobs and contribute to a prosperous UK. This sustainability includes making a significant contribution to communities across the UK.
We have also been reshaping our business to build further on our presence outside of London and deepening our industry specialist teams in key local markets - for example in Reading where we have a technology hub and in Leeds where we have a retail and consumer hub.
This transformation is driven by a recognition that for the UK to prosper post Brexit, we need to play our part in creating a vibrant and sustainable UK economy beyond London, investing in skills and people to drive growth.
Acting in the public interest
Delivering client excellence is a priority within our strategy and we are proud of our work across our core businesses - assurance, consulting, deals and tax.
Given our significant public interest responsibilities, we seek to deliver confidence to the capital markets where we operate. For example, we undertake thousands of audits every year and quality is paramount in our work.
We are disappointed that, for a very small number of audits, our work fell short of what was expected. As a result we received sanctions and we have taken action to deal with the issues they raise.
Overall, our external and internal quality reviews remain excellent, as our recent Audit Quality Review (AQR) results show.
However, we must never be complacent in our work, and we will continue to strive to maintain, and improve, our standards.
We continue to invest significantly in our assurance practice and our transparency report alongside our annual report sets out how we are investing in, and shaping the future of, audit and assurance.
We have continued to manage the market disruption caused by Mandatory Firm Rotation and opportunities have been created for our consulting, deals and tax businesses.
Many of our client successes across our businesses are based on our ability to innovate, and working together we have a large and balanced portfolio of services.
Over the year we embarked on new ways of working such as reaching an agreement with GE to run aspects of their tax operations. We are also focusing on and trialling the use of artificial intelligence in audit. We are using machine learning techniques in our economics team to help predict GDP as well as introducing digital platforms to our deals business.
We are also focused on how we develop our people to have the skills to support our clients.
With that in mind, we rolled out cloud-based collaborative technologies, such as Google, so we can transform the way we work together with our clients.
This year we announced a new technology higher apprenticeship programme, whereby 80 students will have the opportunity to grow their skills while studying at Leeds and Birmingham Universities.
This new approach supports our desire to give more people from a broader range of backgrounds the opportunity to have a tech career. Our brand helps us attract and develop the very best talent in the market and we continue to gain recognition for our work to empower our people.
The two main challenges we face are addressing the implications of Brexit and ensuring we maximise the benefit of technological change. These are profound and long term challenges.
We want to make sure that we are absolutely alongside our clients in this time of change.
Technology has the potential to solve some of the biggest problems of our times, foster greater productivity and free up people to do more interesting work. We intend to play a role to ensure that we continue to balance the short-term needs of our clients with the longer term strategic changes of the fourth industrial revolution.