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. In Scotland, revenue is up 6% from the previous year - the fourth year in a row Scottish growth has outpaced the UK overall.
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.
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. In Scotland, the figures closely mapped to the UK details.
Kevin Ellis, PwC Chairman and Senior Partner, commented:
“Supporting our clients 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 UK is essential for the UK to prosper post-Brexit, and we need to play our part.”
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.
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 in Scotland has continued to invest to ensure a strong offering not only in traditional services but also the offerings clients and companies need to succeed in the modern marketplace.
Lindsay Gardiner, regional chair for PwC in Scotland, said:
“As across the UK, this has been a challenging year, but I’m delighted that we have managed to not only keep operating to our high standards but also grow the business. This is across a number of lines of service, ranging from core services, like audit, tax and deals, to more modern challenges of technology, digital and security.
“What is also particularly pleasing is that our expertise in these new areas is being recognised at the highest levels. For example, our Scottish cyber security operation is one of the largest in the country and was involved in delivering analysis alongside the National Cyber Security Centre and BAE Systems after uncovering and disrupting the major global cyber espionage campaign known as Operation Cloudhopper.
“Add in to this our significant investment in CodeBase and our creation of SCALE, one of Scotland’s first long-term initiatives to help scale-up firms in Scotland, we are showing we are changing in response to the changing nature of the Scottish market and Scottish businesses while still offering the more established services our clients expect.
“Our investment hasn’t purely been external though. Our Aberdeen operation moved to the city centre to take up residence in The Capitol building and we have invested in the latest cloud-based working methods internally, giving staff a lot more flexibility and collaborative agility.
“Oil and gas activity for the Scottish offices picking up by 4% also seems to confirm what we said in our last Sea Change report - that with the right advice and the industry coming together, there is life in the North Sea yet.”
Across Scotland, more than 100 graduates and school leavers started their careers with PwC or undertook paid work experience and internship opportunities.
Social mobility data for the 2017 UK 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.
Lindsay Gardiner said:
“Encouraging social mobility and promoting diversity are vital for the future success of the firm. Our Scottish senior leadership team, has a 50/50 gender split and our largest business lines - Assurance and Tax - are led by women.
“Aside from that, the staff here continue to do a lot of good outreach work. During the year we had senior politicians visit us to learn more about the work we are doing around our staff and their wellbeing, particularly mental wellbeing.
“Our communities team continue to work with schools and a large number of social entrepreneurs and our fundraising for a wide number of charities has been particularly strong through events such as Ride the North and our annual charity event ‘One Firm One Day’. It’s also nice to be recognised for our efforts in this field. For example, we've just been shortlisted for an RSPB Nature of Scotland award for our environmental volunteering.”
Lindsay Gardiner said:
“The coming year will see businesses looking for help on a broad range of issues, such as GDPR and the new Criminal Finance Act, as well as their traditional needs. Of course, on top of all of that, individuals and organisations are starting to focus on the implications Brexit negotiations, both within the UK and abroad, so we expect to see a lot more activity around this.
“It may even be a period of relative stability compared to the last few years - there are no UK or Scottish elections or referenda planned and we don’t leave the EU until 2019. Businesses know what the stakes are, they are focused on what the next few years may bring and are looking for advice to help them through what could be a challenging few years.”
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.
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.
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.
Notes to editors:
Total tax contribution is based on the taxes borne by the firm and partners which include 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.
Please note the Scottish revenue figure is not released as a financial figure.
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