The early financial results of the UK top 50 show a 4% revenue increase in 2015-16, analysis by Legal Week has revealed.

An examination of the results of the 25 top 50 firms to have released their results at this point show that revenue has grown by 4% across the group. Profitability has also grown by 2%, according to the results of the 16 firms that have given profit per equity partner (PEP) figures.

The magic circle had a much better year in 2015-16 than in 2014-15, with both revenue and profitability ticking upwards across the group after stagnating last year.

Setting aside Slaughter and May, which does not release financial results, the magic circle firms grew by 4% in 2015-16, compared to an anaemic 1% in 2014-15.

PEP also grew across the group by 5%, whereas it remained static in 2014-15.

The big winners out of the magic circle firms were Freshfields Bruckaus Deringer, which grew revenue by 7% and PEP by 8%, and Clifford Chance, which grew revenue by 3% and added 10% to its PEP figure, taking it to £1.23m in 2015-16.

Allen & Overy delivered the most modest performance of the group, with just 2% revenue growth and flat profit. The firm was overtaken by Freshfields in revenue terms and is now neck and neck with Linklaters, with both firms reporting revenue of £1.31bn in 2015-16.

Alan Hodgart, a consultant at Hodgart Associates, said: "The overall 4% rise doesn't surprise me – outside the magic circle you are talking 2%-6% growth, which is about right in a tough market."

Tony Williams of Jomati Consultants said the slow M&A market in the first half (H1) of 2016 would have had a dampening effect on the results of the top 50 in 2015-16.

Mergermarket data released last week showed that the UK had been particularly affected, with M&A values falling by nearly 70% in H1 compared to the equivalent period last year, falling to $59.6bn this year from $185.3bn last year.

Williams said: "Firms normally have a surge towards the year-end and that probably petered out because of Brexit and economies cooling generally."

The performance of the City-based firms was mixed, with the some of the best performances coming from Fieldfisher, which delivered growth of 8% and boosted its PEP by 9%, and Stephenson Harwood, which grew revenue by 9% and kept PEP steady at 1%.

Two firms reported a revenue decline in 2015-16. BLP's revenue contracted by 2%, but the firm managed to increase PEP by 4% to £683,000; and Ashurst shrank by 10%, with PEP plunging 19%.

Hodgart said: "It looks like generally people are getting revenue up but not profit, which suggests they are cutting prices to get the work but not getting the costs down."

The firms that delivered the strongest revenue growth were Osborne Clarke (OC) which saw revenue jump by 21% to £171.6m, and Clyde & Co, which grew revenue by 13% to £447.3m.

Both firms have benefited from a programme of international expansion during the past few years, with OC opening offices across Europe and the US in recent years and Clydes launching in Scotland this year through a merger with local firm Simpson & Marwick, and bringing onboard a 30-lawyer team in Australia from Lee & Lyons.