PricewaterhouseCoopers (PwC), Britain’s biggest accounting firm, has proved the adage that it’s an ill wind that blows no one any good by reporting record fee income in the UK of £2.25 billion amid the financial crisis.
PwC’s role as administrator of the European arm of Lehman Brothers, the US investment bank that collapsed spectacularly almost a year ago, alone generated about £100 million in fees for the year to June 30.
The firm received £811 million for work across its various practices carried out for financial institutions, including Barclays and Lloyds TSB, as the surge in restructurings and growth in its consultancy practice boosted overall performance by nearly 1 per cent.
Revenues from audit and tax work, formerly the staple of accounting firms’ revenues and profits, dipped.
Auditing fees fell by 1 per cent to £861 million, providing about a third of the firm’s turnover. Fees from its tax practice fell 4 per cent to £650 million, hit by a decline in income from mergers and takeovers.
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The fall in these divisions was offset by a 5 per cent rise to £737 million in fees from advisory practices, which include corporate recovery, management consulting and fraud investigations and other forensic services relating to legal disputes.
Overall net profit was £667 million for the year, with the average partner’s share of profits down by 3 per cent, to £777,000, as they invested in the business.
This year PwC acquired Sustainable Finance, an environmental consultancy run by Leo Johnson, brother of Boris Johnson, the Mayor of London, and said that it planned to rebuild its management consulting arm by trebling revenue to £1.3 billion in the next four years, less than a decade after selling its consulting arm to IBM.
PwC held its place as Britain’s top professional services firm by revenue and headcount, extending its lead over Deloitte, its closest rival. PwC’s staff edged up to 15,200 and it made 200 voluntary redundancies before Christmas. It plans no further job cuts.
The firm, one of the private sector’s biggest graduate recruiters, took on 1,000 university-leavers last year and promoted 53 new partners.
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Ian Powell, PwC’s UK chairman and senior partner, said: “It was a tough year for our clients and ourselves, but we’ve delivered a good, solid set of results given the backdrop.”
Deloitte has reported a 2 per cent decline in revenue to £1.97 billion for 2008-09, with net profit down 6.1 per cent at £601 million.