KPMG, the professional services firm providing audit, tax and advisory services, has announced today a large increase in profits from £358m to £455m (27 percent) for the financial year ending 30th September 2013. Overall revenues increased marginally by 0.4% from £1,806m to £1,814m. Advisory services saw a 15 percent annual increase in contribution to profits from £268m to £308m, while tax saw a small reduction in contribution from £141m to £140m for 2013. Audit saw the largest increase in contribution of the three functions, up by 16 percent from £154m to £178m.
Simon Collins, UK Chairman of KPMG, said: “We have completed the first and toughest year of our three year transformation plan; getting a sustainable grip on the bottom line. I’m really proud that, as a result, we have generated double digit growth in profitability, which boosts us from fourth to second of our peer group. Improved profitability means that not only have we been able to increase our employee bonus pool but we have also reserved part of this year’s profit for investment in improving the quality and increasing the breadth of our services, with plans to invest £450m in the UK over the next three years. This investment is already starting to take shape with the opening of our new Tax Compliance centre in Glasgow in April; the acquisition of Makinson Cowell, which completed in June, and the launch of the KPMG Capital investment fund in November.
“The role of the professional services in the country’s economic fortunes - alongside financial services and big business more broadly - continues to be in the spotlight. We are absolutely committed to continuous improvements in audit quality and have played an active role in industry reform, such as the recent Parliamentary Commission on Banking Standards. I also firmly believe that a good business is a profitable business. Accordingly, we have seen the introduction of the Living Wage have a positive effect on our firm and supply chain. We are also backing the work of our national charities - Shelter and Action for Literacy - to tackle the housing shortage and deteriorating literacy levels, which impact both society and business.”
Key metrics from the annual report for 2013:
- The firm generated £1,814m in revenues and £455m of profit;
- KPMG in the UK has 583 partners and employs c10,800 staff;
- The employee bonus pool has increased by 20 percent from £61m to £73m. Average partner pay has increased by 23 percent from £580,000 to £713,000;
- Total taxes collected as agent or paid by KPMG, its partners and employees was £702m;
- The Chairman and Senior Partner’s pay for the year, recommended by the Remuneration Committee and approved by a vote of the partners, was £2.42m;
- Strong performance seen across SME and large corporate clients; technology-related issues such as cyber security and infrastructure;
- New audit appointments included RSA, ELEXON, the University of Oxford and the Oxford University press, plus internal audit appointment highlights such as Tullow Oil.
Collins went on to say: “We are firmly on the front foot for the year ahead, with early Unilever and Berkeley Group audit wins setting the tone. We have ambitious plans to build on 2013’s successes in cyber security and infrastructure, amongst others, and drive growth with additional strategic investments. We are also bolstering growth plans by building on relationships along important international corridors into growth economies, notably supporting UKTI trade missions, and supporting our clients in local markets as they return to growth."
“In the UK, we are expanding our services in the high growth technology sector, building on our Tech City hub in Shoreditch, with similar developments in Cardiff, Bristol, Leeds and Manchester. Our latest UK tax competitiveness report has shown that business still feels that the UK is one of the most competitive geographies to locate. We support a fair regime, which is stable and backs companies’ efforts to grow; striking the right balance between encouraging investment into the UK and generating tax revenues for the benefit of the UK as a whole.”
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.