KPMG’s Northern operations outperform UK
BIG Four accountancy firm KPMG saw its Northern operations improve in what it described as a “challenging” year. The firm’s revenues in the North climbed by 6.6% on a like-for-like basis to £209m.
This bucked the trend elsewhere at KPMG, where its overall European revenues dropped back by 3% to €4.28bn and like-for-like UK income remained flat at £1.6bn. Margins improved significantly, though, with pre-tax profits up 10% to £428m, leading to a profit per partner of £763,000.
The firm’s northern chairman, Jonathan Hurst, said that the increase in income had been achieved as a result of a stronger performance from its advisory division, which recovered to make up approximately a third of its overall North West revenues of £108m.
He credited the firm’s corporate finance team led by Jonathan Boyers in the north for growing its share of the mergers and acquisitions market. In the North West, it advised on the sales of TravelJigsaw to Priceline.com, Bury-based Antler to LDC and the buy-out of Fish Insurance from Mosaic Private Equity to Inflexion.
Its transaction services team also advised on the disposal of Pets at Home to KKR and the flotation of Blackburn-based interactive whiteboard maker Promethean World.
“John Boyers and his team had a cracking year,” he said. “They’ve got a good trackrecord and they’ve been dominant in the M&A market locally.
“A lot of good assets came to the market at the start of the year, and we were in the right position to deal with them.”
Its restructuring division also won a number of important commissions, including the administration of construction services business Connaught and Southport-based holidays park firm Pontin’s.
“From the tax point of view it’s also been a good year,” he added, stating that after a difficult 2009 its northern tax revenues increased to £66m.
However, although he described the audit division as “essential” to the company’s role, he admitted that revenues in its audit division had come under pricing pressure as the market becomes more competitive.
Overall UK audit revenues were down 5.6% to £459m, but Hurst said that its role as auditor to many firms often led on to revenues from consulting or other service lines.
“We try not to be a barrier to clients and sit along with them to attempt to deal with any issues they have. If you work more closely with them and try to add some value, they will pay you.”
The firm also announced a pan-European recruitment drive to employ an additional 3,000 people across the continent over the next three years.
In the North West, it currently employs 836 people across its offices in Liverpool, Manchester and Preston – 66 of whom are partners.
Looking ahead to next year, Hurst said that the picture remained uncertain and added that the region’s economy was likely to be impacted by the planned cuts in public sector employment.
“I don’t think the private sector can absorb it all,” he said. He also added that the pipeline for merger and acquisitions work is also “a little softer” than at the same stage 12 months ago.
“People with investment decisions to make are tending to defer unless they have a dead cert or a pressing business need,” he said.
