Consultancy giant EC Harris secures record results

Group turnover for the financial year 2006/07 moved to £203m up 16%, with profit also increasing by 16% to £29.8m from £25.6m in the previous financial year. The performance is stated after investment of £7.5m.

The Group has a long tradition of operating in the UK but reported more than 25% of its profit from Europe, Asia and the Middle East. The Middle East is the fastest growing market with turnover rising from £7m to £14m in the year. A European network of wholly-owned offices enabled the firm to increase earnings on the back of investments by developers, investment banks and private equity together with corporate rollouts into new markets. Turnover in the region grew by 22% on last year. Operations in Shanghai and Hong Kong performed well in a strengthening market, growing fee income by 15%.

Richard Clare, Chairman of EC Harris, said:

"These results show that we continue to develop as an international innovator and leader with a clear positioning as the client's trusted advisor wherever they operate. We have served indigenous clients in most European countries, the UAE and are looking to increase the quality and value of assets in developing markets."

Commenting on the UK business, Clare said: "In the UK, the business grew its turnover to £154.7m from £138.6m across a spread of clients in the public, infrastructure and property sectors. The growth reflects a very satisfactory portfolio of commissions for leading clients.

"We have used the strength of our performance to underpin a 130% increase in investment in the things that attract and develop people, our systems, environments and the training and development of our people. It is normal for a business to invest in such a way, but our pattern of investment to support a sustainable international business is, we think, greater than our rivals.

"We also continue to ensure that current and previous staff of EC Harris have final salary pensions that are protected. Pension deficits are a fact of life for most modern businesses, ours is well managed and we have again invested a further £1m as a proactive step to accelerate the reduction in the risk in the pension funding.

"We reward exceptional performance for all our people with a bonus scheme, and have increased the amount available by 64% for the year. We have also increased profits available to partners by 34%."

Philip Youell, Chief Executive of EC Harris, explains; "Profit distribution at EC Harris is driven by personal performance contribution. This is affected by the Group's overall profit which is set by the firm's business leadership team achieving target earnings for all partners and thereby creating a larger bonus pool for associates and staff.

"We distribute profits widely based on personal performance and contribution, and incentivise our leaders on this basis. Our highest earning partners are those who have a wide impact on our business through their performance. This year the highest earning partner earned £703K up 30% on last year.

"The Group competes in a number of different markets including construction, business consultancy and FM, making comparisons with other firms difficult. Whilst accounting rules may be applied consistently in other businesses compared to EC Harris, the underlying approaches to investment, partner status, reward, and the treatment of costs will differ. For example, EC Harris' approach to cash drives policies providing the benefit of cash payments of profits in full within four months of year end, whilst others declare profits that are retained 'in the business'. Similarly, the approach to property leases where increased costs are a trade-off for greater flexibility in short leases.

"A comparison of year on year performance of one business against another may be more useful. Judged in this way, our year on year comparison is excellent and demonstrates that we are building a sustainable business that can, and does, grow in all market conditions."