Investments dent profits at KPMG

KPMG’s £196m investment in its long-term growth, including new offices in Leeds and Manchester, subdued its profits as the firm’s revenues nudged nearer £2bn.

The firm spent £49m on acquisitions, including Boxwood and Leeds-based Nunwood, and £27m on staff development during the year in which it said it “positioned itself strongly for future growth”.

Its three-year “grip, build and grow” strategy is designed to reposition the business in its markets.

Revenues increased 2.6%, about £50m, to £1.96bn in the year to September. However the investments resulted in a 7% fall in pre-tax profits to £383m.

The Big Four firm said that its 617 UK-based partners would receive average pay of £623,000 for 2015, a reduction of £92,000 year on year.

Simon Collins, UK chairman of KPMG, said: “Our industry is in the midst of historical change: the statutory audit is being overhauled at home and internationally; the tax debate is hotly contested and the demand from business for independent consulting services in transformation, risk, technology and corporate finance is huge.  

“Overall, we have invested £196m in our business to set it on the path to sustainable long-term profitable growth.  Though growth is not yet where we want it to be, we have held our nerve on our investments and I am pleased that we are now seeing returns come through.”

The firm has refreshed its visibility in the north by moving its Leeds operation to a new building in Sovereign Square last month following the relocation of its Manchester team into One Peter’s Square in January.

Chris Hearld, KPMG’s North region chairman, said: “Our Northern business is signing off on a very pleasing year, which has seen us achieve some long-held goals that are benefitting both our clients and employees.
 
“Clearly our property investments represent our most visible statements. However, I am without doubt every bit as pleased with the hard won client briefs we have secured in the last 12 months, as well as rewarding more than 150 of our talented people with promotions.”

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