PracticeConsultingIPO costs KPMG Consulting £91m

IPO costs KPMG Consulting £91m

KPMG Consulting has reported a third quarter loss of $101.7m (Pounds 70m) due to a one-off charge resulting from its recent listing.

The consultancy was billed $131.3m (Pounds 91m) as a non-cash deduction from earnings, due to the conversion of its preferred stock to common stock.

According to a company spokesperson, the one-off charge represented the difference between IT giant Cisco’s $500m investment in KPMG Consulting in 2000, and the market value of these shares when KPMG Consulting went public.

Putting the one-off charge aside, results for the quarter were healthy. Revenues climbed to $751m, an increase of 19% on the year, leaving overall growth for the first nine months of its fiscal year at 26%.

The company attributed its higher revenues to a 41% increase in its communications and content division, a 52% rise in its high-technology business units and a 15% increase in its public services unit.

Revenue for the nine months ended 31 March 2001, totalled $2.1bn compared to $1.7bn for the same period of the prior fiscal year.

Announcing the results, Rand Blazer, chairman and CEO of KPMG Consulting, said he was pleased with both the growth and profitability of the company in its first quarter since going public.

He added: ‘I am also pleased to report that we have started to turn the corner on employee turnover, as we anticipated that we would, with the completion of our IPO. Voluntary turnover dropped to 19.8% for the quarter.’

His words were echoed by executive vice president and CFO Bob Lamb, who said the company had performed well in a ‘tough economic environment’.

KPMG Consulting became the first arm of a Big Five firm to go public on 8 February this year. It offered 112,482,000 shares of its common stock at $18 a share, valuing it at over $2bn.

The stock has suffered a loss in value since listing, and was last quoted at $15.92.

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KPMG launches consulting IPO

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