Scyne’s $81m Loss Highlights Post-PwC Struggle

Scyne Advisory is trying to chart a new path after Allegro Funds bought PwC Australia’s consulting arm for a headline $1, aiming to restore trust and win back government business, but the firm has just posted an $81 million pre-tax loss.

The acquisition came after a reputational crisis at PwC, where confidential government tax plans were reportedly shared with corporate clients. Allegro renamed the consultancy Scyne and positioned it as an independent player, free from legacy issues. But the fallout saw a sharp decline in federal contract wins, which had been the bulk of the business’s revenue.

Data reveals Scyne now secures just a quarter of the federal government work it once did under PwC. Staffing has also shrunk, from 1,200 to 1,000 employees and from 100 to 75 partners, as competition intensifies. Despite the challenges, Scyne insists it will return to profitability by July, although market peers question that timeline given the loss of major government clients and ongoing cutbacks.

The much-publicised $1 deal is more complex than advertised. Regulatory filings show Allegro actually paid $14.3 million, including a $6 million "bargain purchase" adjustment, and injected an additional $90 million in working capital. This fresh funding raise casts doubt on the simplicity of the symbolic acquisition narrative and highlights the scale of the turnaround challenge.

Scyne isn't the only firm navigating a shifting market. Newer players like Nous Group, with deep public sector experience, have taken over federal and state contracts previously dominated by PwC and other large consultancies. Overall consulting spend by Canberra has declined only slightly, from $680 million in 2020 to $660 million in 2024, but the beneficiaries have changed, with Deloitte, EY, and KPMG now getting a larger share of the pie.

The Albanese government has pledged to reduce its spending on external consultants, but clear figures remain elusive. AusTender data suggests some firms underreport consulting fees, categorising them differently, and agencies like NBN Co aren’t even required to report in full.

As Scyne pivots away from its self-description as a “government consulting specialist” to working with “public for purpose” entities in sectors like healthcare and energy, it's also making internal culture shifts. For example, all employees are now made equity holders, a move intended to boost morale and commitment even as financial performance lags.

Allegro Funds remains optimistic, expressing long-term confidence in Scyne's direction. But with rivals earning 5 times more from government clients and public inquiries bringing greater scrutiny to outsourcing, Scyne’s comeback faces significant headwinds.

Source: The Australian, Daily Telegraph, Scyne