PwC reports growth for 14th year running

Global accountancy firm PwC has reported record revenue of £3.6 billion for the year ended 30 June 2017, up 5 per cent from £3.44 billion last year, with revenue in Scotland up 6 per cent on 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 per cent, 7 per cent, and 7 per cent respectively, with the Deals practice down slightly (-1 per cent) 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, said: “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 per cent 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 per cent 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 per cent 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 per cent of the latest graduate intake were first generation graduates, 74 per cent attended state school, 14 per cent 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.

Mr 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.”

Mr Gardiner added: “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.”