PwC picks up the pace with record revenue

Marion Dakers
PROFESSIONAL services giant PwC said today its annual revenues have risen 6.5 per cent to a record £2.6bn, in a return to strength following several years of sluggish growth.

Overall profits for its UK, Channel Islands and Middle East operations jumped 10.8 per cent to £727m in the year to 30 June.

The results came as PwC's boss conceded that the firm needs to communicate better with the companies it audits and their shareholders.

Calling in today's City A.M. for business to defend its achievements, chairman Ian Powell said his industry "need[s] to engage much more constructively with the investor community to understand their concerns about the scope of auditing and the style of reporting we produce.

"Put simply, we cannot afford to ignore the basic reality that our longterm future depends on investors seeing real value in the role we perform."

The audit industry is being scrutinised by the Competition Commission and European politicians amid fears that the market is cornered by the socalled Big Four companies.

PwC, which audits 40 of the FTSE 100 firms, posted 4.1 per cent revenue growth to £656m for its audit unit.

A string of insolvencies helped the firm's deals division hike its revenues eight per cent to £561m. As well as ongoing work on Lehman's collapse, PwC was drafted in to help with Petroplus and Game during the year.

Total staff costs rose six per cent to £1.14bn with a three per cent jump in headcount. PwC spent £11m on termination benefits, up from £5m a year ago. "We took a decision at the start of the downturn to continue to hold our nerve and invest in our business," Powell said.

Average profit per partner for the year was £798,000, up 4.6 per cent. The 11 member executive board's attributable profit was estimated at £22.4m, a collective increase of 9.8 per cent.

But actual average profit distributed per partner was £679,000, four per cent lower than the £707,000 distributed in 2011, thanks to payments to retired partners and equity adjustments.