Changing client demand has seen a strong performance across our business
Delivering profitable growth
We’ve once again seen strong growth over the past year, with client demand for our diverse and relevant expertise and services remaining steady against a backdrop of significant macroeconomic pressures and geo-political turbulence.
Our Group gross revenue - which includes the UK, Middle East and Channel Islands firms - was up by 16% to £5.8bn year on year, an increase on the 12% growth performance in FY22. We saw increases across all of our key industry sectors.
The FY23 success was driven by a solid performance in the UK and Channel Islands throughout the year, despite stubbornly high inflation and rising interest rates. In the Middle East, the advisory market continued to show dynamic growth, buoyed by strategies to transform and diversify beyond oil-based economies.
Clients are at the heart of everything we do, and we seek to remain relevant across our markets through our multi-disciplinary approach and ongoing investments in our core and emerging services.
Market impact
Total group profit for the financial year was £1.3bn.
For the UK partners, distributable partner profits averaged £906,000 per partner, a reduction in comparison to the FY22 result following planned investments in people, capabilities and assets.
The Audit practice saw an impressive 19% revenue increase, with revenue growth across all geographies, as client demands grew in line with broadening reporting requirements, and increasingly drew on other specialist skills within the firm including tax, cyber, pensions and ESG.
Manufacturing
and Services
Health Industries
Markets
Media and
Telecommunications
and Resources
An increase in mandatory carbon emissions reporting requirements, like TCFD (Task Force on Climate-Related Financial Disclosures) for UK and EU listed organisations, focused clients on environmental performance and led to increased demand for our wider sustainability transformation services.
Within natural business cycles, the global deals market contracted in FY23, challenging our Deals business, and to a lesser extent our wider associated advisory services. We continue however to develop and evolve our deals related services in preparation for an increase in activity in an environment with a higher cost of capital.
The Consulting practice saw exceptional growth of 30%. This was driven by demand in the Middle East, as clients invest in programmes to modernise and diversify the region’s economy beyond oil. Energy diversification and sustainability are also behind many UK transformation projects, as the climate crisis and new reporting requirements galvanise businesses to move towards net zero.
We saw a 19% growth in the Tax practice on a like for like basis - excluding the FY22 disposal of our global mobility business - while our Deals and Risk practices increased by 6%. Each of our service areas, excluding Audit, experienced increased demand for Execution Managed Services, where clients engaged PwC as a business partner to run and optimise their complex processes, combining this with our specialist capabilities.
We’re partnering with 30+ technology organisations across all of our non audit businesses, co-creating value for our clients, and continuing to grow our transformation and managed services offerings.
Our Group continued to develop its strong Financial Services proficiency across all service areas, with growth of 18% to £2bn. The appointment of the Natwest audit and retention of HSBC will build upon this expertise. Activity across the Group’s markets saw good growth in both our Government & Health Industries and Energy, Utilities and Resources sectors.
Investing for the future
Our performance overall speaks to the relevance of our strategy, which is built on leveraging technology, delivering exceptional client outcomes, empowering our people, and on being committed to high quality and sustainable profitable growth.
We’ve continued to invest to maintain our quality and to keep our business performing well for all of our stakeholders. We are focusing on technology, including Generative AI, Next Generation Audit technology, sector tailored cloud solutions and building digital assets.
We are committed to our people and are investing in them through benefits, upskilling and financial reward. We are also evolving and improving our buildings to offer sustainable, state of the art spaces with the right technology, where our people and clients can come together to collaborate, innovate and learn from each other.
The evidence gap
Impact on Urban Health is a part of Guy’s and St Thomas’ Foundation, a family of charitable organisations with the shared mission of health equity. As part of its work, Impact on Urban Health operates a ten-year programme which includes exploring the relationship between children’s health, and the availability and affordability of healthy food.
With schools acting as a vital route to children and young people, the organisation has a particular interest in research regarding free school meals (FSM) and related attainment, opportunities, and other social, economic, and health benefits.
While previous studies had identified positive outcomes from FSM - nutritional benefits and improved school performance, for example - there was a paucity of UK-focused data that assessed the cost and benefits rigorously over time. In the face of a compelling but disparate research base, there was a stark need for credible, comprehensive analysis that assessed the potential short, medium, and, crucially, long-term benefits.
To fill this evidence gap, Impact on Urban Health called on our dedicated sector knowledge and economic expertise.
A successful application by our team for Community support - in line with our purpose ‘to build trust in society and solve important problems’ - enabled us to produce an even more substantial piece of work than was initially proposed.
We agreed three main objectives:
- Conduct economic analysis of two FSM expansion scenarios.
- Develop literature to inform the debate about food insecurity for children.
- Productive engagement with relevant stakeholders.
Currently, households in England must earn less than £7,400 after tax and before benefits to be eligible for FSM. Our analysis was designed to assess FSM expansion under two scenarios - firstly, the impact of expanding provision to all children from households in England that receive Universal Credit and, secondly, of extending entitlement to all children attending English state schools.
To deliver this, we brought together people from across our Government & Healthcare Industries and Economics teams to collaborate with experts at Impact on Urban Health and its stakeholders - including the School Food Review coalition, central and local government, and academics specialising in childhood obesity. The team we built reflected different ethnicities, genders, and socio-economic backgrounds to support diversity of thought.
We also worked with the client to revise the existing theory of change through an exercise mapping key activities, outputs, outcomes, and impacts of FSM provision. Another priority was aligning the methodology and language used in the report to reflect those used most commonly in this field, including by government, to support accessibility and impact.
“We commissioned PwC to undertake the most ambitious analysis to date into the societal and economic benefits of increasing free school meal provision in England. Together with our partners, we believe that this ground-breaking analysis more than provides the evidence required for a transformational policy shift in school food.”
Programme Director, Impact on Urban Health
In addition to quantifying the cost of each scenario, we modelled core benefits - defined as those arising directly from the children in receipt of FSM, including savings for schools, families, and the NHS, and increased lifetime earnings and contributions. We also quantified wider indirect benefits, which refer to economic and supply chain gains.
As the table to the left illustrates, expanding provision under both scenarios could deliver billions over twenty years.
Our teams were energised by the opportunity to use their skills and experience to fulfil a critical research need, adding momentum to the work of Impact on Urban Health and other organisations in the health equity ecosystem.
The findings generated significant national press coverage and were cited as part of Mayor of London Sadiq Khan’s announcement that free school meals would be funded for all primary school children in London for the year starting September 2023.
Community impact
Volunteering is a vital part of our community strategy - alongside fundraising, discounted work, and financial contributions. It’s one of the ways our highly skilled workforce use their time and talents to deliver social, environmental, and economic benefits UK-wide.
And this year our impact was greater than ever, with 28% of our people working with hundreds of charities, social enterprises, schools, and other organisations to reach over 31,500 beneficiaries. We far exceeded our target of 50,000 volunteering hours - delivering almost 78,000 hours, of which 37% were skills-based and 23% were environmental. Our total community contribution - cash, time, and in-kind support - exceeded £10m this year.
Our people volunteer year-round but our annual firmwide day of volunteering and fundraising - One Firm One Day (OFOD) - in May 2023 was a particular highlight, with over 300 teams taking part. We also continued the work of the PwC Foundation - our registered charity, established over a decade ago to promote social inclusion and sustainable development in the UK. Funds raised during OFOD tipped the donations made via the Foundation to staff-voted charities, including Hospice and Crisis, to over £1m since 1 July 2020.
We’re also committed to raising aspirations and helping young people from lower socio-economic backgrounds develop the skills they need to access quality jobs, particularly through New World New Skills schools programmes.
Likewise, working with social enterprises is central to our strategy and a natural fit with our purpose. Our PwC Social Entrepreneurs Club grew to over 350 members this year, allowing us to support leaders to grow sustainable businesses that tackle social and environmental challenges. We did this through coaching, workshops, bespoke support, and further developing our Black Social Entrepreneurs programme in Scotland.
Other areas of impact included expanding our partnerships with organisations that help refugees into employment, our water safety initiative with the Black Swimming Association, and support for a cost-benefit analysis of expanding the provision of school meals.
In addition to our formal community programmes and in recognition of the vital role of targeted place-based investments to redress regional disparity, we also funded social value projects proposed and led by our people around the UK.
Global network
Globally, PwC network revenues rose by 9.9% in this financial year (ended 30 June 2023) to US$53.1bn. This growth was driven by over 360,000 people working for 178,000 clients across 151 countries. India was the fastest growing of the 21 largest firms in the PwC network with a revenue increase of 24%.
Nearly 130,000 new people joined PwC member firms in FY23 (an 11.1% increase on FY22), of which 32,000 were new roles. We are now two-thirds of the way to our goal of creating 100,000 net new jobs over five years.
The PwC network invested US$3.7bn in the last 12 months in building our capabilities to deliver for clients. We continued to invest US$1bn in audit quality and improved audit quality inspection results year-on-year.
Across the network, firms have also invested nearly US$2bn to expand and scale our AI capabilities and emerging technologies including US$1bn+ in the US, US$418m in China and Hong Kong, US$200m in Canada, €150m in Germany and £100m+ in the UK.
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