PwC UK 2022 financial results: growth across whole business as a result of sustained multi-year investment
18 Aug 2022
Commenting on the UK financial performance for the year ended 30 June 2022, Kevin Ellis, PwC Chair and Senior Partner, said:
“Our business is diverse - demand across all our services has driven our strong performance. This reflects exceptional client demands to challenges and opportunities on multiple fronts. It is a testament to the quality of our people and services and the multi-year investments we have made.
“Our clients have drawn on specialist skills and experience from across our business in response to the pace of change as they’ve dealt with supply chain complexity, the accelerated climate change challenge, energy scarcity and higher inflation issues. In the face of disruption they want to understand how technology can help them as they transform their businesses.”
Financial performance
Overall revenues, which include revenues for the UK and Middle East, grew 12% to top £5bn, up from 2% growth in FY21, when activity was initially frozen by the pandemic and then rebounded in the second half. The investments we made through the pandemic to preserve all jobs propelled our growth when demand recovered at pace. We also benefited from highly engaged teams and our people engagement score reached an all time high of 80%.
Demand for technology enabled transformation has continued to grow during the second half of FY21 and into FY22. More and more clients are looking to cloud technologies, not just for the security benefits but for greater access to data as well as for opportunities to grow. We have also won more work in the area of Execution Managed Services, supporting our clients in the delivery and running of large and complex programmes. All of this has contributed to our overall Consulting revenues increasing 33%.
Our audit practice achieved 6% growth, as did our Deals line of service. Deals growth benefited from strong transactions activity and growth in our value creation services. Tax (which includes People & Organisation and Legal services) recorded 9% growth. A breakdown of financial performance by business area is included in the table below.
The sectors experiencing the strongest growth were Financial Services and Industrial Manufacturing and Services.
Average distributable profit per partner was £920,000, up 12% on the previous year (£818,000), with an average effective tax rate of 47%.
During the year the PwC Global Network also disposed of the Global Mobility and Immigration business. Around 50% of the UK’s share of proceeds was reinvested in the business in support of our strategic priorities, particularly people, skills and technology. The balance was distributed to partners as owners in the business (average £105,000).
Investment in people and capabilities
These results allowed us to make the biggest investment in UK staff salaries for ten years (with an extra £165m increase on prior year) which saw 70% of employees receiving at least a 7% increase to base pay, with 50% getting a rise of 9% or more. Salaries for many of our entry programmes are also increasing - for example, starting salaries in audit will rise by 10%. A further £138m was allocated to UK staff bonuses in FY22 up £10m on the prior year.
Audit remains a key investment area - we recruited more than 550 experienced professionals and invested further in audit technology in support of our continued focus on improving quality. This year the Financial Reporting Council gave 83% of PwC audits it inspected the highest rating.
Other notable capability investments include the acquisitions of supply chain consulting firm Olivehorse and technology innovation firm Pollen8.
Broader impact
Our strategy to use our influence and reach to have a positive, lasting impact informed our decision to create a tech hub in Manchester, our commitment to sustainable offices (including our new Belfast office which opened at the start of the financial year), and our continued work to improve social mobility. We launched a new work experience programme ring-fenced for students from low income backgrounds (which took place again this month), published our socio-economic pay gap for the first time, and joined a consortium of businesses to support Ukrainian refugees into skilled work. Over the year, PwC is taking on more than 2,000 school leavers and graduates across the UK. This includes students through degree apprenticeships, which PwC has been expanding. Ada College in Manchester being the latest addition.
Kevin Ellis added: “I don’t see the market slowing any time soon, but we can’t be complacent. High inflation and high employment, which haven’t been seen together for a long time, is a combination that will impact all businesses. We’ve invested heavily to put us in the best position to deal with these challenges which will likely reduce partner profits next year as things currently stand. It’s not just about financial investment but creating the right culture to stand us in good stead, and best support our people, clients and communities.”
Ends
Financial highlights for year ended 30 June 2022
Revenue by business division:
| Business area | 2022 revenue | 2021 revenue | 2020 revenue | Growth v 2021 | Cumulative growth v 2020 |
|---|---|---|---|---|---|
| Consulting | £1,324m | £996m | £1,057m | 33% | 25% |
Audit |
£1,133m |
£1,069m |
£1,003m |
6% |
13% |
Tax |
£1,015m |
£935m |
£912m |
9% |
11% |
Deals |
£906m |
£854m |
£781m |
6% |
16% |
Risk |
£516m |
£458m |
£468m |
13% |
10% |
Global mobility and immigration services |
£108m |
£135m |
£159m |
(20)% |
(32)% |
Total |
£5,002m |
£4,447m |
£4,380m |
12% |
14% |
Tax services above exclude global mobility and immigration services revenues identified separately, the latter of which contributed ten months’ of revenue during 2022 and a full year for each of 2021 and 2020.
- Total consolidated profit of £1,396m excludes the gain on disposal of the global mobility and immigration services business on 29 April 2022. Total consolidated profit for the financial year to 30 June 2022 including this gain was £1,535m (up 31% from £1,171m). The average distributable profit per partner before tax and one-off gains was £920,000 (up 12% from £818,000 in 2021), with an effective tax rate of 47% (2021: 48%).
- The firm’s consolidated financial performance includes revenues for PwC in the Middle East, which after accounting for foreign exchange variances increased by 27% to £1,044m. Underlying local currency Middle East firm net revenues were $1,196m, up 20% on prior year.
- The firm’s total tax contribution in the UK was £1,506m (2021: £1,336m) and consisted of £891m in taxes collected and £615m in taxes borne.
Notes to editors
Annual Report
PwC UK’s 2022 digital Annual Report for the year ended 30 June 2022 will be published on 14 September 2022. The firm’s consolidated results include revenues for the UK and Middle East. Kevin Ellis is Chairman and Senior Partner of PwC in the UK and the Middle East.
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