KPMG UK Revenues up, but Profits Down
KPMG saw revenues rise by 7% in the UK last year, but profits were down by 5%, due in part to a slowing in demand for mergers and acquisitions work.
UK revenues totalled £1707m, up from £1602m the year before. The strongest performing area was risk consulting, which posted a 43% increase in revenues from £158m in 2010 to £226m.
Tax and management consulting revenues also rose, by 12% and 11% respectively, but there was a 3% decline in audit revenues and earnings from merger and acquisition activity fell by 5%. Fees from audit dropped to £456m from £468m, with the firm saying a highly competitive market had resulted in downward pressure on fees.
As a result, overall profits were £396m compared with £416m previously. Average profit per partner was £683,400, around £80,000 less.
John Griffiths-Jones, KPMG UK chairman, said: ‘Our two weak spots were M&A and Government spending. We thought M&A would recover slightly last year but it hasn’t. That’s why the profit performance is disappointing.’
KPMG Europe performed better, posting a 13% increase in turnover from the combined firms in 18 countries, reaching €4,589m in 2011 compared to €4,065m in 2010. Russia, Turkey and Spain all boosted earnings, while revenues in Germany remained flat. Risk consulting was again the strongest growing activity, along with management consulting, while auditing remained broadly constant and tax showed some increase.