PwC UK reports continued growth for 14th year running

PwC, the professional services firm, has reported record revenue of £3.60bn for the year ended 30 June 2017, up 5% from £3.44bn last year, as the firm continues to invest in people, technology and its regional presence in response to client demands.  For the third consecutive year PwC’s results are being released alongside a fully digital annual report, entitled Leading in Changing Times – making a difference, which provides detailed insight into the firm’s strategy, performance and societal contribution.

2017 performance

Kevin Ellis, PwC Chairman and Senior Partner, commented:

“Overall, business performance was solid in a challenging and complex market. We continued to invest significantly in our core and digital services, new technologies and create jobs, despite a slowdown in some sectors due to uncertainties related to the EU Referendum result, US Presidential and UK General election.

“We saw high demand from UK and overseas clients for our insurance, regulatory and real estate services, as well as for supply chain, transaction services and cost reduction support. Across the UK, we grew strongly in Northern Ireland, Scotland, Midlands and the South East.”

The Assurance, Consulting and Tax business divisions grew by 4%, 7%, and 7% respectively, with the Deals practice down slightly (-1%) as strong transaction services based growth was offset by the winding down of some long-term insolvency and forensic assignments. The Middle East practice performed particularly strongly, up 23%.

Profits for 2017 were £822m, down 1% on 2016, as the firm continued to invest heavily in people, technology and growth areas. The average distributable profit per partner before tax was £652,000, down 8% from £706,000 last year, as the overall number of equity partners increased to 953, from 926 last year.

Our clients and investments

Iwan Griffiths, PwC North West regional chairman, commented:

“Supporting our clients across the region is our priority and we’ve invested in innovative new services, using artificial intelligence, virtual reality, and innovative cloud technologies, to help them tackle their immediate and longer term challenges and opportunities. We’re transforming our business to ensure we have the right skills and technologies to assist with the challenges facing our clients as a result of the 4th industrial revolution. Building a vibrant and sustainable economy right across the North West is essential for the region to prosper post-Brexit, and we need to play our part.”

“Investing in our regional footprint is a priority for the firm evidenced in the fact that PwC Manchester will soon move to new state of the art offices at No1 Spinningfields. This move will ensure that we have the ability to continue to attract the best talent, provide more specialisms and continue to grow our practice”. 

New innovations include using artificial intelligence in audits, acquiring data technology firm Selera Labs and GE’s tax team and technologies to digitise tax services, investing in Brainspace and Seal technology to apply AI in forensic investigations and deals, and using machine learning techniques to help predict GDP and other economic trends. Furthermore, the firm established an alliance with CodeBase, one of Europe’s largest tech incubators, based in Edinburgh, to support fast growth businesses, and the Scale-up programme helped 33 disruptive start-ups across the UK grow their businesses, raise equity and build their networks. The cyber security practice, working with the National Cyber Security Centre and BAE Systems, uncovered and disrupted a major global cyber espionage campaign (Operation Cloud Hopper).

Investing in core services is critical to the firm’s ongoing success and this year the audit quality review results from the Financial Reporting Council (FRC) were particularly strong. A number of historical regulatory matters were concluded and improvements made to processes and procedures.

PwC has seen significant growth across the UK regions and invested to reflect market opportunities, moving into new offices in Leeds, Bristol, Aberdeen and Southampton, opening a technology industry hub in Reading, building a specialist blockchain team in Belfast, and recruiting 55% of our 2017 graduates into roles outside London.

Our people and social mobility

More than 1,500 graduates and school leavers’, including 151 higher apprentices, started their careers with PwC and 960 students undertook paid work experience and internship opportunities. The firm hired graduates from 76 universities and visited 178 schools to help potential recruits understand the career options available. Over 1,300 experienced professionals were also recruited. 

The firm launched an innovative new technology degree apprenticeship with the Universities of Birmingham and Leeds to give 80 students per year an opportunity to earn while they learn, giving people from a wider range of backgrounds the opportunity to pursue a tech career.

Social mobility data for the 2017 graduate intake shows the numbers of recruits from more diverse backgrounds is improving. 39% of the latest graduate intake were first generation graduates, 74% attended state school, 14% came from homes eligible for income support and 10% were eligible for free school meals.

PwC extended its commitment to diversity by becoming one of the first firms to publish BAME pay gap data, in addition to its gender pay figures, and progress against gender and ethnicity targets.

Kevin Ellis commented:

“Encouraging social mobility and promoting diversity are vital for the future success of the firm. The more transparent we are with our diversity and social mobility data, the more we hold ourselves accountable to achieving real change towards our goal of being a truly diverse organisation.”

Looking ahead

Kevin Ellis concluded:

“I’m optimistic about the market outlook. While there is uncertainty ahead and UK businesses are looking for a smooth Brexit transition to minimise disruption to the economy and their customers, businesses will be closely watching the government's trade discussions with other countries to understand and capitalise on new trading opportunities post-Brexit.  We’re seeing clients looking to us for advice as they balance the short term domestic agenda with longer term strategic opportunities and the competitive advantage that new technology and a changed regulatory environment can bring.”

2017 financial highlights

●       Revenues by business line:

Business area

2017 revenue

Growth v 2016

2016 revenue

Assurance

£1,296m

+4%

£1,241m

Consulting

£772m

+7%

£720m

Deals

£649m

-1%

£654m

Tax

£881m

+7%

£822m

●       The average distributable profit per partner was a multiple of 12 times the average employee pay and bonus, compared to 12.8 in 2016 and 13.6 in 2015.

●       The firm’s total tax contribution – which comprises taxes borne and collected – was more than £1.16bn, up from £1.12bn last year.

●       PwC is a founder member of the Buy Corporate Social Challenge and spent over £1.5m on procurement from the social enterprises in its supply chain.

2017 non-financial highlights:

●       For the third year, PwC has published a purely digital annual report. You can find more information and explore the report at www.pwcannualreport.co.uk (from Monday 18 September).

●       PwC published its gender pay gap for the fourth year in a row and became the first professional services firm to publish its data under the new Government regulations for large businesses. PwC’s gender pay gap for 2017 is 13.7%, down from 15.2% in 2016;

●       The firm has become one of the first organisations to publish a BAME (Black and Minority Ethnic) pay gap. The BAME pay gap of 12.8% is driven by the fact there are fewer BAME staff in senior roles and more in junior and administrative positions. The firm is focused on recruiting and retaining junior BAME staff and improving the rates of progression into more senior roles.

●       PwC published its progress against its gender and ethnicity targets for all levels of the business for the second year running.

●       More than 82,500 people applied for a job with PwC and the firm now employs more than 22,600 people and 953 partners across 62 offices in the UK, Channel Islands and Middle East.

●       The PwC Foundation’s “Race for £3 million” campaign exceeded its target, raising more than £3.2m for six charity partners - Alzheimer’s Society and Alzheimer Scotland, Beyond Food (part of our joint-venture social enterprise, Brigade), Groundwork UK, National Literacy Trust and Wellbeing of Women.

●       PwC employees voted for Samaritans and UK Youth as the firm’s new charity partners, in line with its commitment to supporting mental health and promoting social mobility.

●       The firm established a data lab in London and introduced a responsible technology policy.

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