PwC growth drives increased investment in quality, people, technology and regional presence to better serve stakeholders in an uncertain environment

Sep 16, 2019

  • Higher than expected demand as clients seek help tackling uncertainty, risk and the need to transform

  • £140m investment planned for year ahead in people, quality, training, technology and upskilling

  • 38% of newly promoted partners this year are women

  • More than 10,000 UK employees now based outside London

  • 73% of office energy use is now renewable and plastic consumption reduced by a third

 

PwC UK, the professional services firm, increased its revenue for the year ended 30 June 2019 by 12% to £4,233m.  The firm’s financial performance, which includes revenues for PwC Middle East, is published today (Monday 16 September 2019), in the firm’s fifth fully digital annual report - ‘Building a Digital Future’. The report also contains details of the firm’s environmental, diversity and inclusion indicators and insights on its strategy and purpose.  

 

Kevin Ellis, PwC Chairman and Senior Partner:

 

“At a time of considerable uncertainty, PwC continues to make a significant contribution to the UK economy. Professional and business services is the fastest growing sector in the economy, accounting for 11% of UK GDP, and the largest contributor to services exports. Maintaining this position for the UK and our business is critical.  However, businesses must also prove they can deliver more than just good economic returns, which is why I am proud of the continued investment our business is making to address the UK’s skills gap and in helping equip organisations and society for the fourth industrial revolution. We have intentionally shifted gear to make a bigger contribution to addressing the UK's social mobility challenge by creating more job opportunities in less prosperous parts of the UK and by redoubling our efforts to become a top social mobility employer.

 

“We experienced high demand for our core services and, in particular, for technology-related solutions. Against a challenging political and economic backdrop our performance reflects our commitment to delivering for our clients and making continual investment in our people and our business.

 

“We remain optimistic about the UK post-Brexit and are keen to play our role in ensuring people from a diverse range of backgrounds can contribute to the UK’s success. Clearly, there are risks associated with the UK’s planned exit from the EU. Significant work has gone into ensuring we have the necessary resilience in our own business and the right expertise to support our clients. We are committed to creating quality jobs across the UK and working with corporate Britain, government and education providers to ensure we’re building a strong digital future across the UK.



Business performance

 

“All of our businesses grew, as we responded to market demands and supported clients with their challenges. Across our business divisions, Assurance revenues increased by 8.1%, Consulting revenues were up by 22.1%, Deals grew by 8.7%, and the Tax practice, which includes specialist areas such as workforce consulting, legal services and pensions, experienced growth of 13.5%. The Middle East practice grew by 19.1%.

 

“In the face of uncertainty and the fourth industrial revolution, clients sought our support to transform their businesses, with 21% of revenues this year coming from technology-related services. Our Intelligent Digital approach of combining business and industry insight with technology solutions delivered greater efficiency and value for our clients as we help them adapt to the increasingly complex world they operate in and tackle their biggest challenges.

 

“We supported clients across the public, private and third sectors, with areas of high demand over the year including cyber, data and digital services.  We experienced particularly strong growth from clients in the technology, media and telecoms, consumer markets, financial services, and energy, utility and infrastructure sectors.

 

Regional expansion

 

“Belfast is now our second largest UK location, with 2,300 staff, as demand for our Operate business, which delivers large operational and managed service solutions to meet regulatory, risk and compliance challenges, was high and we expanded our Belfast office as a result.  We opened a brand new office in Bradford and created new Technology Labs in Reading and London. We are in the process of moving to new and larger offices in Birmingham and Belfast - cities where our teams have grown by 60% since 2016 - as we continue to expand our regional footprint. 

 

Building diverse and inclusive teams

 

“As one of the UK’s biggest employers we have taken action to create more opportunities and reach communities across the country. Some 103,000 people applied to join us at all levels - school leavers, graduates and experienced hires - and we welcomed more than 4,000 new joiners.  We also took on our first cohort of 111 tech degree apprentices at five universities across the UK, giving young people from a broad range of backgrounds the opportunity to build a career in technology. 

 

“The external market remains highly competitive. Our people face an era of significant change and we are focused on embedding a culture that engages our people and empowers them to grow their skills and confidence to achieve career success. Over the year, we increased training and development for our people, delivered record staff bonuses, and gave our people an additional day’s holiday.  We were pleased that despite uncertainty in the market our people engagement score increased by four percentage points to 75% in our last staff survey.

 

“We are committed to widening the routes into our firm to provide opportunity for people from all backgrounds and were pleased to be named a top employer for young people in the All About School Leavers Awards. Last year we recruited graduates and interns from 100 different universities reflecting our focus on a diverse workforce. Beyond the people who work for us, we’ve been providing young people across the country with the skills they’ll need when entering the world of work and this year over 20,000 students benefited from our work with schools. We believe that major employers like PwC have a responsibility to open our doors to a wider pool of talent - both because it produces a real business benefit and it helps to improve social mobility across the country.

 

Investment in technology and training

 

“Our strategic investments in key technologies, as well as learning and development programmes such as our ‘tech for all’ digital programme, have accelerated our transformation and we have grown our strategic technology alliances.  Through the adoption of Cloud-based tools like Google, Salesforce and Workday and our AI and automation processes we have transformed our own business. We are using these technology tools not only to change how we are working and delivering for our clients but also to bring our own implementation experience to client projects. Investment in  innovation, technology and upskilling our workforce remain key priorities and we plan to invest a further £140m this year, including £30m in audit quality.

 

Investing in audit  

 

“We have responded constructively to the multiple regulatory reviews into the audit profession.  Our Future of Audit initiative which launched in November 2018 saw us engage with hundreds of stakeholders on how they believe the audit needs to evolve.  We welcome more choice in the market and reforms that will improve audit quality and are committed to playing our part in building trust and confidence in the sector. We rolled out our wide-ranging Programme to Enhance Audit Quality in which we are recruiting an additional 500 people, investing further in training and technology, and have commissioned an independent paper on the culture of challenge in audit from Professor Karthik Ramanna.  We are disappointed that this year’s FRC audit quality inspection results were below the high standards we are committed to achieving on all of our audits. Supporting our teams to deliver high quality audits consistently is the primary objective for our Audit business.

 

Our impact on the environment

 

“With concern about the climate and ecological crisis at an all time high, our commitment to the low carbon and circular economy is more important than ever.  We’ve slashed the carbon emissions associated with our offices by a further 37% this year, bringing the total reduction since 2007 to 90%, while continuing to grow our business. In that time we’ve also reduced our energy consumption by 57%, and 73% of the energy we use in our offices is now renewable. We continue to pioneer ‘circular economy’ initiatives in our offices, holding our recycling rate at 90%, and reducing our plastic consumption by a third this year.”  

 

2019 Financial highlights:

  • Revenue by business division:

Business area

2019 revenue

Growth v 2018

2018 revenue

Assurance

£1,442m

+8.1%

£1,334m

Consulting

£950m

+22.1%

£778m

Deals

£773m

+8.7%

£711m

Tax 

£1,068m

+13.5%

£941m

 

  • Profit for the financial year was £1,016m (up from £935m in 2018) and the average distributable profit per partner before tax was £765,000 (up from £712,000 in 2018).

  • The firm’s total tax contribution was £1,265m (up from £1,182m in 2018) and consisted of £760m in taxes collected and £505m in taxes borne.

  • The effective UK tax rate for partners was 48% (2018: 48%).

 

2019 Non-Financial highlights

  • More than 4,000 new people joined the firm in the UK including 1,345 graduates and school leavers, and 2,718 experienced hires

  • 111 Tech degree apprenticeships fully funded at the Universities of Birmingham, Edinburgh, Leeds, Queen’s in Belfast and St Andrew’s. This will rise to 300 new students this year.

  • Additional £30m per year audit quality improvement programme unveiled including the recruitment of an additional 500 experienced auditors

  • New office opened in Bradford, new Frontier technology labs opened in London and Reading,  and Belfast is now our second largest UK office with 2,300 people

  • The number of businesses signing up to our Tech She Can charter has doubled to 128, helping ensure more young women pursue technology careers

  • Our people volunteered more than 83,000 working hours benefitting 33,000 communities across the UK. 

     

Notes to editors:

Digital Annual Report

For the fifth year running we’re using case studies, data explorers, infographics and videos in a fully digital Annual Report to help people learn more about our firm, allowing us to be more transparent about what we’re doing, how we’re innovating, and what we stand for.  We hope this will help build understanding of who we are and what we do. Please do take a look at pwc.co.uk/annualreport.

 

Total tax contribution

This is based on the taxes borne by the firm and partners which included corporation tax, income tax, employer National Insurance Contributions and business rates and the taxes collected on behalf of the government – PAYE, net VAT and employee National Insurance Contributions. 

 

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with over 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

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Jamie Harley

Head of media relations, PwC United Kingdom

Tel: +44(0)7803 455 664

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