Deloitte Ireland revenues surge to €429m but client sentiment ‘more cautious’

The bulk of the firm’s growth in Ireland was driven by its consulting wing

A surge in companies seeking advice on digital issues and climate change helped to drive growth in revenues at Deloitte Ireland by 24.3 per cent to €429 million in the 12 months to the May 2022.

Audit revenues at the firm rose by 12.2 per cent to €88.3 million, the group’s latest annual transparency report shows. Meanwhile, non audit revenues, which include the consulting wing of the firm, rose 28 per cent to €340.6 million. The bulk of the growth came in consulting contracts for businesses for which Deloitte Ireland is not the auditor.

Growth in the firm’s Irish operation outpaced the increase in revenues at Deloitte globally, which averaged 20 per cent in the 12 month period.

When asked to comment on the drivers of the growth, Deloitte Ireland chief executive, Harry Goddard, said the “standout” issue that many companies had turned to its consultants to seek help with was the management of change, especially with challenges in the areas of digital, climate and regulatory issues.

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He said SMEs (small and medium businesses) are focused on using digital change to grow their businesses and make them more efficient, while the firm’s multinational clients were more focused on seeking help with regulatory compliance.

Many of the companies that are the firm’s clients are suffering from staff shortages that have limited their capacity, he said. He also warned that sentiment among its client base was “more cautious in recent months”.

He said the economy, as Deloitte sees it, is currently split into several “sub economies”. On the one hand, Mr Goddard said, large, well-capitalised businesses are focused on digital change and climate objectives and managing supply chains.

“On the flip side, the impact of the real economy on SMEs is significant,” he said, adding that consultants needed to help these businesses focus on the local economy and keep the “wheels turning”.

“Over recent months client sentiment is more cautious, reflecting inflationary pressures and knock-on impacts on buying behaviour and affordability, a trend we expect will continue into 2023. Many SMEs are now facing a perfect storm as Covid supports and tax warehousing give way to Revenue demands and rocketing input costs,” said Mr Goddard.

He said some businesses will need access to sufficient debt facilities to stave off liquidation.

Deloitte Ireland employs about 3,000 staff with a roughly 50/50 gender split, its transparency report shows. The firm, whose main office is on Dublin’s Earlsfort Terrace, is currently looking for a new 19,509 sq m (210,000 sq ft) headquarters building as it shifts into a hybrid working mode.

Mark Paul

Mark Paul

Mark Paul is Business Affairs Correspondent of The Irish Times. He also writes the Caveat column