KPMG UK profits drop 13%

KPMG grew its revenues approximately 4% in 2012, but could not prevent a 13% drop in UK profits.

Revenues climbed to £1,774m from £1,707m over the year, but profit fell from £403m to £349m.

Its UK tax arm shrank by approximately 3% in 2012, with its revenues dropping around £12m from £392 to £380m. The Big Four firm's other service lines all posted growth figures.

Audit remained the strongest-performing arm, growing 3% to £469m from £456m, with transactions and restructuring overtaking tax to become the second-largest area by revenue, also growing 3% and taking £389m in 2012.

Management consulting made the greatest leap, growing 12% over the year to take revenues from £255m to £286m. Risk consulting also made significant strides over the year, growing 11% to £250m from £226m.

The firm recently lost 275 staff as part of a restructuring exercise in order to streamline its operations after the firm "maintained high staff levels in some areas of our business in anticipation of a wider economic recovery that failed to materialise".

UK senior partner Simon Collins said 2012 had been a "challenging year".

He said: "We were pleased to grow revenues, and some parts of our business, such as risk consulting and management consulting, have seen double-digit growth.

"Our profitability fell because of investment and because we maintained high staff levels in some areas of our business in anticipation of a wider economic recovery that failed to materialise.

"Nonetheless, we continue to invest for the future. There are signs that market conditions are improving slowly, and the first few months of our new financial year have been encouraging. Having put in place a number of measures to reshape our business, I am confident that the right foundations are in place for 2013."