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KPMG UK records highest growth in a decade

KPMG UK’s revenues increased by 8% from £2,172m ($2,766m) to £2,338m for the FY ended 30 September 2018. Its underlying profit increased by 18% year-on-year, reaching £365m.

The firm said that a buoyant M&A market helped grow its deal advisory practice by 14%. Its audit practice grew by 8%, in part due to gaining important new clients.

KPMG noted that regulatory changes and trends within global politics, such as Brexit and US tax reform increased demand for advice, which saw KPMG’s tax, people services and legal practice grow by 7%. The firms consulting business grew by 5%.

The firm hired 1,365 graduates and apprentices, an increase of 22% in student recruitment on last year and the highest intake since 2011. Of these new employees, 48% are based in offices outside of London.

In total, the firm employed 14,587, and increase of approximately 500 from the 13,969 recorded in 2017.

This compares to PwC UK’s growth of 5% to £3bn, Deloitte UK’s growth of 5.1% to £3bn, and EY UK’s growth of 2.7% to £2.4bn.

KPMG UK chairman and senior partner Bill Michael said: “Since taking on this role, together with my leadership team, I have refocused the business on our core strengths aligned to the firm’s public interest responsibilities.

“These actions have put us on the right trajectory. We are seeing growth right across our service lines, attracting talented people and winning major mandates. Our pipeline is strong and I am excited about the future.”

He continued: “Beyond our financial results, the aspect that has pleased me most about the course of the year is the firm’s work to increase social mobility. We’re investing across the United Kingdom, recruiting people from all backgrounds, straight from school and university, to support our growth.”

The results come in the same month as the UK’s Competition and Market Authority (CMA) plans to publish its review in to the UK audit market, following the of public and political scrutiny of the audit market over the last year.

KPMG UK faced heavy criticism in January over the work it conducted for the collapsed outsourcing company Carillion. A report into the company’s collapse by the Work and Pensions and Department for Business, Energy and Industrial Strategy assessed the Big Four to have ‘conflicts of interest at every turn’.

Following the report and the announcement of the CMA launching an investigation into the market, KPMG decided to stop providing non-audit services to the FTSE 350 clients it audits. In the firm’s submission to the response of the CMA market study, it recommended the ban to be rolled out across all audit firms in the UK.

Michael said: “I have been clear that our wider profession faces challenges. In order to safeguard against any perceptions of conflict of interest, we have drawn a clear line between our advisory and audit work for UK listed businesses.”

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