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Straight-talking
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Niche marketing pays
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Career's Fair Report
Accenture sees fourth-quarter profit up by 50%
 
 Accenture has reported a
51% increase in fiscal
fourth-quarter profit,
while many analysts
expressed relief that
the company withdrew
from the money-losing
NHS contract without
suffering any penalties.
   Quarterly income grew
to $346.4m, or 56 cents
per share, up from
$229.1m, or 38 cents per
share, last year.
Stronger sales,
especially from
outsourcing, lifted the
results according to the
company.
   Sales rose to $4.39bn
from $4.31bn a year ago.
   For the year,		 
 Accenture said profits
were $973.3m, compared
to $940.5m for fiscal
2005. In addition,
FY2006 net revenues rose
9%, to $16.65bn.
   For the year,
Accenture’s consulting
net revenues were
$9.9bn, an increase of
6%, while outsourcing
net revenues were
$6.75bn, an increase of
13% in US dollars over
fiscal 2005.
   The company said new
bookings for fiscal 2006
hit $20.4bn.
   Meanwhile, Computer
Sciences Corp has
confirmed that it will
assume Accenture's		 
 responsibilities to the
United Kingdom's
National Health Services
(NHS) agency.
   Echoing the
sentiments of other
commentators, Credit
Suisse analyst Eric
Sledgister said the NHS
contract had been a
thorn in Accenture's
side, and he estimated
that it resulted in a
net loss of $700m since
the contract was signed
in 2003 (excluding
capital expenditures).
   Sledgister told
clients: "The decision
to walk reduces further
operating losses,
increases overall		 
 visibility for the
company, and frees up
management's time to
focus on running the
rest of the business.
Importantly, the company
is to incur no penalty
payments upon contract
termination (contrary to
prior reports of a
breakup fee amounting to
$1.9bn)."
   Transferring the
contract, which covers
north east and eastern
England, removes a
significant drag on
Accenture's earnings
after the company booked
a $450m charge on the
pact in the quarter
ended in March. 		 
    About 300 employees
who worked on the
contract will go to CSC
and the remainder will
be reassigned to other
UK projects, Accenture
said.
   CSC, which is
currently responsible
for the IT upgrade in
the North West and West
Midlands of England,
said it would take over
from Accenture on 8
January and that the
contract was worth as
much as £1.97bn.
   		 
 
Asian buoyancy and emerging markets fuel revenue rise at Ernst & Young
 
 Ernst & Young has
reported healthy global
revenue growth for the
fiscal year ending 30
June 2006. The firm saw
worldwide revenues
increase to $18.4bn,
which represents a
year-on-year revenue
increase of $1.5bn and a
growth rate of 10% in
local currency terms.
   The figures represent
the performance across
Ernst & Young’s three		 
  
   
 
 
 
 114,000 people to
providing seamless,
consistent, high-quality
client service,
worldwide,” said James
S. Turley, Ernst &
Young’s chairman and
CEO.
   TAS led the service
lines, posting 16%
growth, reflecting the
increased level of
corporate deals
worldwide. AABS revenue
grew by 11% owing to		 
 continuing strong demand
for assurance and
risk-based services. Tax
revenue improved by 6%
against a background of
continuing regulatory
and legislative reform.
   Ernst & Young
achieved 9% growth in
the Americas; 19% in
Northern Europe, Middle
East, India and Africa;
6% in Central Europe; 7%
in Continental Western
Europe; and 14% in the		 
 Far East, Oceania and
Japan.
   Ernst & Young said
that while its ‘mature’
markets continued to
perform well, growth of
between 25% and 55% was
achieved in the
emerging-market
economies in which they
have made strategic
investments.
  
   		 
 service lines –
Assurance and Advisory
Business Services
(AABS), Tax, and
Transaction Advisory
Services (TAS).
   “This was another
year of strong growth
for Ernst & Young,
growth that demonstrates
the commitment of our		 
 
KPMG merger to create Europe’s biggest professional services firm
 
 KMPG has announced plans
to merge its UK and
German operations to
create Europe's largest
professional services
firm. The deal is the
first announced by a Big
Four firm after the
introduction of the
European Commission’s
Eighth Directive
legislation, which will
allow cross-border
mergers between
accounting firms next
year.
   The merger will		 
  
   
 
 
 
 
 
 
 
 
 
 
 
 incorporate into
national laws some time
next year. The deal also
requires the approval of
partners in the UK and
Germany firms.
   It will create a new
entity, KPMG Europe,
which will operate as a
limited liability
partnership. The newly
merged firm will number
more than 17,000 staff
with a projected
turnover of more than
£2bn.
   Until now, EU law has		 
 prevented cross-country
ownership in accountancy
firms. As a result, the
four biggest accountants
in Europe –
PricewaterhouseCoopers,
KPMG, Ernst & Young and
Deloitte – all operate
as networks, with
separate firms in each
country.
   KPMG said it expects
its member firms in
other EU countries to
join the new firm once
their own governments
ratify the legislation.		 
    John Griffiths-Jones,
the chairman of KPMG's
UK business, said the
merger would also give
the firm more
opportunities to
influence European
lawmakers. He said:
"KPMG Europe will have a
strong European business
voice to champion
improved audit quality,
liability reform and the
highest standards of
professionalism in the
public interest."
   		 
 become possible once the
UK and Germany ratify
the Eighth Directive,
which the two countries
are expected to		 
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