“Businesses are striving to put their strategic plans into action for the upcoming years, while contending with persistent external factors like employee shortages, ongoing inflation, heightened competition across a number of industries and uncertain long-term market conditions. Additionally, many businesses are actively assessing how they can harness developments in technology, particularly the application of data analytics and artificial intelligence, to improve their efficiency, while also considering how the increased focus on ESG will influence their operations in the coming years. Our Deals, Consulting, and Risk and Regulation business units, which make up our Advisory practice, continue to assist our clients in addressing these and many other challenges that they constantly face.”
Malta’s GDP growth is expected to slow down over the next two years, decreasing from 7.5% in 2023 to 4.9% in 2024, and further to 4.3% in 2025. Relative to the euro area average, Malta’s GDP growth trajectory however remains robust, driven largely by domestic consumption and net exports. Unemployment in Malta remains low, standing at 3.1% in 2023, and is expected to stay at this level over the next two years. Meanwhile, inflation is set to decrease from 5.6% in 2023 to 2.5% in 2024 and further to 2.1% in 2025, as services and food price inflation are expected to normalise gradually, similar to trends in other euro area economies.
Deals
Our Deals team is committed to driving value for businesses by helping organisations identify and successfully carry out transactions, such as mergers, acquisitions, divestitures and restructurings, with the goal of maximising value.
In the last year, we have continued to witness a decline in global transaction activity due to higher interest rates, and market and economic uncertainty. Nonetheless, the local market continues to be relatively active. During the last financial year, we were engaged to assist clients in several significant local transactions, particularly in the local middle market segment as well as in the online gaming sector. One of the major transactions handled by our team in the past year, included buyside assistance to one of the larger global fashion retail companies that acquired a substantial shareholding in a locally owned fashion retail group that operates in Europe and Africa. Members of our transaction services team also continued to be involved in a number of global transactions in collaboration with other PwC offices in Australia, Denmark, Luxembourg and Saudi Arabia. These opportunities offer our people a unique opportunity to gain invaluable experience by working on a larger variety of transactions.
Given the evolving market dynamics and the challenges faced by many local companies, we anticipate a continued need for market consolidation in the coming years. To address this, we have established a dedicated M&A team to assist potential sellers in preparing their businesses for sale and identifying suitable buyers. Additionally, we support potential buyers in finding targets that align with their organisations. Our expert team guides clients through the entire transaction process, from preparing necessary documents and materials to managing the transaction to ensure a smooth and efficient process.
Our valuation team includes a group of highly technical specialists with experience in valuing businesses, real estate, complex financial instruments and intangible assets. In the past year, we have carried out valuations across all these categories for various reasons including transactions, recognition in the financial statements, business and/or shareholder restructuring and transfer pricing assessments. Beyond the valuation services offered to clients, we offer ongoing support to our Assurance practice and the broader PwC network, particularly in the preparation of fair value assessments, impairment testing, and going concern evaluations.
After a quiet period linked to the high-interest rate scenario, momentum in the local capital markets has picked up in recent months. Our team continues to be active as financial advisors in a number of corporate debt listings on the local market. Activity in terms of equity issue remains limited, principally due to our relatively illiquid secondary market for equity instruments that is making it difficult for local IPOs to be viable.
In the past year, we have also supported several clients in the preparation of feasibility studies and in assessing strategic alternatives, aimed at optimising shareholder value. We also help clients by combining our corporate finance skills with data analysis to identify opportunities that create value for their organisations.
The investment in staff upskilling over the past few years is yielding significant results. Our team is now proficient in using a wide range of advanced data tools such as Power BI and Alteryx. With this strong foundation, we have now shifted our focus to upskilling our team in the use of Artificial Intelligence tools. In the coming months, we will be launching Junction, an AI and data-powered tool that will enable us to engage with clients in real-time thereby enabling us to provide them with insights from our engagements more efficiently and effectively.
Risk and Regulation
Our Risk and Regulation team assists organisations in navigating the complex landscape of risk management. Amongst other services, we help clients continuously improve their internal controls and their internal audit functions, prepare business continuity plans, and provide forensic services.
Over the past year, we have supported several licensed financial institutions and non-regulated entities by offering full internal audit outsourcing, co-sourcing, and internal audit advisory services. Additionally, we have helped numerous clients in both the public and private sectors develop risk management frameworks, drafting conflict of interest policies, and providing ad hoc training in these areas. We have also been involved in engagements where we assisted clients in articulating their risk management and internal control frameworks sections in the business plan prepared for submission to the regulator as part of the licence application process.
Management Consulting
Our multidisciplinary team of management consultants have throughout this year continued to support our clients to develop and implement sustainable strategies that help them innovate and grow, whilst reducing costs and leveraging their talent. In this regard, we have also been supporting them in navigating their rapidly changing environment, also ensuring that they effectively transform and succeed in reaping the benefits of the adoption of technology.
In FY24, our focus has therefore remained on supporting our clients in both the private and public sector to address their challenges and opportunities across the wide array of consulting services we offer including strategy and research, workforce solutions, EU funding and policy, programme management and sustainability. Besides a continued focus on local clients, this year we also expanded our reach and have supported other PwC territories with their consulting engagements.
Over the past year, we have carried out diverse projects across both the public and private sector, delivering strategic insight to clients by helping them gather and visualise data better. We have combined our research capabilities with subject matter expertise from across the firm to add value to our clients. As a corporate member of ESOMAR, we are committed to uphold the highest level of professional conduct and to implement best practices that support effective decision-making.
Our work has supported strategic decision making, including viability and feasibility assessments which forms part of the due diligence work prior to a merger or acquisition. We have also carried out various market quantification studies spanning across various industries from FMCG, to real estate, renewable energy, and technology. We continue to conduct primary research on behalf of our clients, through online digital surveys using various survey and sampling techniques, as well as mystery shopping, in-depth interviews and focus groups.
We have worked with our clients to create customised dashboards for data visualisation built by our team using the platform most suitable for our clients’ needs. Our tools enable our clients the possibility to interact with the data, uncover trends and insights, filter and drill-down to different data points, and present data from different sources in one place.
In FY24 we have continued to support businesses to benefit from EU funding to assist them in undertaking various eligible investment projects. In this regard we have supported them with both the application process and the preparation of the required business plans related to some of the schemes. This mainly covers EU Funded grant schemes such as the ‘Digitalise your Business’, the Start-Up Enhance, SME Enhance (GBER) and the Retrofit scheme.
In addition, we have also assisted a number of public sector entities and voluntary organisations with applying for EU funding to support their projects as well as assisting them with the carrying out a cost-benefit analysis for their investment projects.
In FY24 we have continued to support businesses to benefit from EU funding to assist them in undertaking various eligible investment projects. In this regard we have supported them with both the application process and the preparation of the required business plans related to some of the schemes. This mainly covers EU Funded grant schemes such as the ‘Digitalise your Business’, the Start-Up Enhance, SME Enhance (GBER) and the Retrofit scheme.
In addition, we have also assisted a number of public sector entities and voluntary organisations with applying for EU funding to support their projects as well as assisting them with the carrying out a cost-benefit analysis for their investment projects.
Effective delivery of programmes and projects has become essential for the successful implementation of many transformative projects our clients are implementing. During this year we provided project management services to a number of clients to support their projects and programmes, such as funding programmes and wider implementation of transformation strategies. This included support in developing the governance for the projects and also support in developing tools such as dashboards to monitor the achievement of milestones, completion of activities, risks, budget, etc.
We have also supported clients issuing Requests for Proposals. Our support mainly consists of advising on best-practice throughout this sensitive process, based on our long-standing experience. We have assisted with the drafting of the tender document, strategic guidance, assistance in the RfP set-up, collation of information, identification of target suppliers/buyers, managing the communication activities, monitoring the RfP process and supporting in the evaluation of proposals, together with other technical professionals.
We have also continued to support private sector clients in submitting their responses to Requests for Proposals. In this regard we have provided project management support, coordinating the inputs required by our clients’ teams and other experts involved in compiling the response, and ensuring that these are provided in a timely manner and to the expected quality levels.
As ESG and the wider sustainable agenda has come to the fore, we have been actively engaging with the Maltese private and public sector to guide them towards more sustainable business models. Leveraging our advisory expertise, this has taken various shapes and forms: from baselining emissions to supporting our client’s transition to a low-carbon economy, to board and staff training around the impacts of ESG, to facilitating the process of achieving ESG certification, to assistance with the external reporting of this information.
By taking a tailored approach to the needs and maturity of each client, we have been helping them align their operations to the rapidly evolving regulatory landscape, particularly in light of CSRD, while at the same time driving home the urgency of measuring and addressing GHG emissions.
We are also supporting the public sector with developing its sustainability policies. One key project throughout the year has related to the Renovation Wave initiative, specifically supporting with improved technical knowhow, methodologies and tools for designing, procuring and supervising deep energy renovations for public buildings. We are also supporting the assessment of the feasibility of introducing new Extended Producer Responsibility schemes as part of the drive towards a circular economy.
In light of the importance of the topic, more detailed information on what we have been doing in this space can be found on our ESG page.
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