Restructuring hits KPMG’s profits but revenues are up

ACCOUNTANCY and advisory firm KPMG has produced a mixed set of results with revenue growing by 4% in 2012 but profits dipping by 13%.

But once again the Midlands operation has outperformed the national firm.

The national figures show the firm reporting total revenues of £1,774m (2011: £1,707m) but profit was down to £349m, a 13% reduction on the 2011 figure of £403m.

Explaining the dip in profits the firm said: “We maintained staff levels in some areas of the business in anticipation of wider economic recovery. Once it became clear that recovery remained more distant, we had to implement a number of job losses, thereby incurring some one-off costs.”

In terms of revenue performance within the firm’s specialist areas, management consulting was up by 12% to £286m and risk consulting was up by £11% to £250m. Audit was also up (by 3%) but tax was down by £3% to £380m.

Mike Steventon, head of KPMG in Birmingham, said: “It has been a good year fro the Midlands again. We had a strong year in 2011 and again in 2012.

“Nationally the story has been about being strong in financial services. In the Midlands we don’t have that volume of financial services activity so our growth has been in industrial and manufacturing.

“In 2008 and 2009 the Midlands went through a big dip. We have pulled out of it driven by export-led activity.”

Steventon said the firm had seen a lot of growth in advisory services, especially helping clients who may be looking to do business overseas.

Corporate finance has also performed well for the firm.

“It has also been a strong year in business disposals with Midlands businesses exiting non-core assets,” Steventon said.

“In corporate finance it has been our best year in terms of growth for the last five years.”

Steventon said that it had been “broadly flat” in the insolvencies area.

“There is less traditional insolvency work than there used to be and more helping companies re-financing and avoiding breaking their covenants,” he said.

KPMG in Birmingham has recently announced six new partners.

“This is in areas where we see future growth,” Steventon said. “We are trying to offer a broader of support to clients and so we are bringing in new specialities.”