PwC grows its Big Four leadership in Australia with $2.6b revenues
PwC has expanded its position as Australia’s largest Big Four accounting and consulting firm, navigating a challenging economic landscape to book $2.6 billion in revenues.
When the Covid-19 pandemic hit Australia’s shores, large professional services firms feared for the worst. But many have demonstrated strong resilience – re-tuning their service portfolios to meet areas in high demand such as restructuring, digitisation, cybersecurity and human capital transformation, while taking measures internally to mitigate the fallout in demand in other areas.
For over a decade, PwC has been the country’s Big Four leader, and going into the 2021/22 financial year (the Big Four operate with mid-year financial years), this will be no different. Despite strong growth from EY and KPMG (the numbers three and four in the market in size), PwC actually saw its lead versus number two Deloitte widen, which faced a revenue drop of 7% in the past financial year.
“Covid-19 has once again created a very tough environment for Australian businesses, including our own, however we are proud of the role our people played in helping our clients navigate successfully through this incredibly challenging time,” said PwC chief executive Tom Seymour on the firm’s performance.
Similar to the picture at rivals, PwC’s financial year was one of two tales. The first half saw income drop, while the second half of FY21 saw significant revenue growth – 12% in the case of PwC.
Consulting took the largest hit in the first half, “as the impact of the pandemic saw immediate reductions in discretionary spend by our clients,” explained Seymour. However, “our Consulting business has undergone a restructure leading to a refreshed focus in the market. Despite the first half challenges, revenue growth was flat (at $610 million)… I’m immensely proud of the work our Consulting team has done to get us to the place where we are now.”
The Assurance division realised revenues of approximately $650 million, while the Financial Advisory division – which encompasses the firm’s deals, private clients, infrastructure, legal and tax businesses – booked approximately $880 million in fees. The firm saw an additional $60 million of revenue which falls outside the three businesses from areas such as social impact advisory.
Like its peers (for example: KPMG), an effective cost cutting campaign led to stronger profit performance than expected. As a result, average partner income grew by 18% in FY21, compared to a reduction of 15% in FY20. Meanwhile, this enable the firm to provide its staff with a record pool for incentive payments and a specific Covid-19 ‘thank you’ bonus, “our largest ever remuneration increases,” said Seymour.
The positive performance also saw PwC announce a record numbers of promotions, including 145 new partners.
“Our greatest asset and the success of our business is the brilliance and ongoing growth of our people. This is why we have prioritised how we reward and recognise our people as a key pillar of our business strategy,” Seymour said.
Looking ahead, the chief executive officer said the firm expects to book “strong double digit growth in the current 2021/22 financial year” on the back of a recovering economy and major investments from PwC in high-growth areas, as part of the firm’s global ‘The New Equation’ strategy.
