Assurance results cloud strong report from PwC

A slowdown in due diligence work has restricted PwC’s revenue surge, the firm has revealed.

While reporting a 7% overall revenue growth rate to £2.24bn, the firm also confirmed that assurance grew by only 3%, taking the arm’s revenues to £1.04bn.

The tax and advisory divisions of the business grew by 8% and 13% respectively. Turnover in tax increased to £675m and advisory grew to £526m.

‘The assurance business is a huge business but quite a lot of it is transaction related, such as due diligence. The last financial year has seen a quieter set of transactions.

‘This accounts for the lower level of growth from assurance to tax,’ said Ian Powell, the firm’s UK chairman.

‘Tax is a fast growing business ­ we’ve now got the human resource consulting side of tax, and advisory remains a fast growing consultancy business,’ Powell added.

Underlying profit growth for the firm over the past financial year rose by 7%, to a total of £675m. The company’s 853 partners will thus share out an average of just under £800,000 per partner, the firm said.

Following a buoyant first half of last year and a significant downturn in the second half, Powell expects the economy’s volatility to continue for some time yet.

‘We think the market is going to be difficult, at least for the next six to 18 months… in tough conditions we have the experience to support our clients and navigate our own business through the challenges of a difficult market,’ he said.

The figures cement PwC’s position as the UK’s biggest firm, but the gap in turnover with Deloitte has narrowed now to less than £200m, or less than 10% of Deloitte’s total revenues.

Former PwC UK chairman Kieran Poynter earned £3m, the annual report revealed. The number of people employed by the firm increased from 14,785 to 15,189.

The report also included the news that it had been named the highest placed professional services firm in The Sunday Times Best Green companies ranking.