Revenues up but profits down at KPMG
Operating profits fall at European arm of Big Four firm despite an increase in turnover
KPMG EUROPE’S revenues have made a double digit rise but, profits have fallen according to its latest results.
Combined turnover increased 13% to €4.5bn (£3.7bn) for the year ended 30 September, compared to €4bn in 2010.
However, operating profit fell to €924m from €945m the previous year.
Risk consulting was the best performing division across Europe was up 16% to €479m compared to last year, closely followed by management consulting which increased 11% to €443 m.
However, audit, the largest area of the business audit saw a decline in revenues pulling in €1.8bn down 2% compared to 2010.
Russia, Turkey and Spain showed strong signs of growth. The UK, one of the two largest practices in Europe increased revenue 7% to €1.9bn compared to €1.8bn in 2010. The other substantial practice Germany, fell slightly to €1,179m from €1,187m last year.
A statement from the joint chairmen of Europe John Griffith-Jones and Rolf Nonnenmacher, said the latest results was a “robust performance” from the Europe arm of the international firm in difficult economic times.
Richard Bennison, KPMG Europe COO, said: “This year has seen a very creditable performance in difficult economic conditions. Our focus throughout the year has been on striving to understand our clients’ needs, to exceed those needs and consistently add value while doing so. Looking ahead, we remain committed to investing in our growth areas and priority sectors.
“No imminent recovery is expected in the M&A and IPO markets and our plans are built around an expectation of continuing volatility in the financial markets. However we expect our Risk Consulting and Management Consulting businesses to continue to capitalise on the market opportunities that are likely to exist across all sectors.”
Employee costs in Europe increased to €2.2bn from €1.9bn in 2010 with the firm employing 32,800 partners and staff.
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Profits in the UK fell 5% to £396m, despite a 7% increase in revenues to £1.7bn.
Audit pulled in £456m in 2011 for the year ended 30 September however, this was a 3% drop compared to the previous year. Transactions and restructuring also declined 5% to £378m, although the firm claims restructuring performance was strong.
Risk consulting was the largest growth sector rising 43% to £226m in 2011 compared to 2010.
This was followed by tax which grew 12% to £392m and management consulting which rose 11% to £255m.
Partner numbers also swelled to 579 compared with 545 in 2010. The rest of the workforce also increased to 10,150 from 9,464.
KPMG hopes to bolster its staff numbers by 7,500 in the next five years including recruiting 150 students this year.