KPMG partners enjoy pay rise as profits jump 53%
Partners at KPMG are celebrating a £601,200 payday after profits at the accountancy giant jumped in 2018.
KPMG UK said the bumper payouts, to be shared on average among 635 partners, represent an increase of around 16% on last year.
It comes as the professional service firm recorded a 53% jump in profits, from £301 million to £462 million, on the back of improved investment returns in technology.
On an underlying basis, profit increased 18% in the year to September 30 to reach £356 million on revenue of £2.3 billion, up 8% in the fastest acceleration of sales in 10 years.
The figures were fuelled by buoyant activity at KPMG’s deal advisory practice, which grew by 14%, while the firm’s audit posted growth of 8%.
Work related to Brexit and US tax reform also drove demand for advice, helping KPMG’s tax, people services and legal practice grow by 7%.
The results represent a turnaround from 2017, when KPMG saw profits tumble on the back of write offs and one-off items.
Chairman Bill Michael, who took home £2.1 million, said: “These results are the product of the tough decisions we have made and the hard work of our 16,000 people across the UK.
“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.”
However, KPMG also put aside £73 million to deal with potential fines and legal costs linked to audit investigations and disciplinary proceedings.
This year alone, KPMG has been sanctioned over its work relating to Bank of New York Mellon, Ted Baker and Quindell.
The results come at a sensitive time for the sector.
The Competition & Markets Authority (CMA), the Financial Reporting Council (FRC) and Legal & General Group PLC chairman John Kingman are all separately looking into the audit industry at the request of the UK Government.
The industry is under scrutiny following a series of high-profile company collapses – such as construction giant Carillion and former high street stalwart BHS – that has damaged trust in the audit process.
This year, KPMG became the first big four firm to stop undertaking consulting work for FTSE 350 companies where it serves as auditor to avoid conflicts of interest.
Mr Michael added: “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.”