PA goes into reverse

After an all but flat performance in the prior year (see here), PA Consulting’s fee income dipped by 4.7% yoy to £753m in FY24 to leave total revenue for the period down by 2.8% at £928m. Tight management by the firm of its direct and indirect costs, however, ensured that the softness in the top line did not lead to a further degradation in profitability. Adjusted EBITDA for the twelve months ended 31st December rose by 6.5% yoy to £218m to generate a margin improvement of 200 bps to 23.5%.

The going proved toughest for PA in its Scandinavia region last year. Fee income in this territory fell by almost a fifth yoy to c.£58m. The firm’s UK business, which accounts for three quarters of global revenue, slipped by 3.3% against FY23 to generate fees of £573m in 2024.

There were some brighter spots reported across PA’s business portfolio. In the Public Sector, which produces nearly two thirds of the company’s UK SITS sales, the end of 2023 saw the firm awarded a place on all six Lots within the Ministry of Defence’s Digital and IT Professional Services framework (see here). PA also expanded its share of the 2023-24 spend via the Crown Commercial Service’s (CCS) Digital Capability & Delivery category of frameworks (see here). Revenue from this channel was up 129% yoy to £89m, driven by significant wins at the Home Office, Cabinet Office and HSE. Outside of this vertical, there were notable UK IT project successes too at both Unilver and Heathrow Airport.

Little by way of commentary on the outlook for the current year was provided by the firm. PA reports that it entered 2025 with both £280 million in sales under contract and a significantly higher yoy sales pipeline. Management believes that the business has a solid foundation for growth. With no imminent prospect of a material easing in the market headwinds, however, PA still has its work cut out to reinvigorate upward momentum in the nearer term.

Posted by: Duncan Aitchison at 09:03

Tags: results   consulting   IT+services