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Britain's workers
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Straight-talking
on consultancy
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Niche marketing pays
in tough market
page 10
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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		 
  
   
 
 
 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.
  
   		 
 Ernst & Young’s three
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 114,000		 
 
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. 		 
  
   
 
 
 
 
 
 
 
 
 
 
 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."
   		 
    The merger will become
possible once the UK and
Germany ratify the Eighth
Directive, which the two
countries are expected to