KPMG UK records strong revenue growth of 9% to £2.96bn

Increased client demand for advice on tax transformation and the use of Generative AI from the firm’s tax and legal business delivered an 8% increase in net sales. KPMG’s consulting arm also recorded an increase in sales of 7%, with clients seeking advice on a range of transformation projects including digitisation. The firm’s audit practice grew 19%, driven by expanded reporting requirements.

The wider slowdown in the global deals market and challenging UK market conditions in the firm’s fourth quarter of financial reporting saw deal advisory sales decrease in the year by 6%.  

Jon Holt, Chief Executive and Senior Partner of KPMG in the UK, said:

“Our people have worked exceptionally hard to deliver strong revenue growth against a challenging economic backdrop. Digitisation and emerging technologies are at the forefront of our clients’ minds, and we have the expertise to meet demand and help them gain a competitive edge. 

“I am confident that our long-term strategy is delivering and putting the right foundations in place to transform the business for future, sustainable growth.” 

Investment in retaining and attracting talent underpins KPMG UK’s three-year strategy to transform the firm for future growth.

The business reported a reduced profit before tax of £364m, following a 17% increase in staff costs. This was due to the firm’s desire to remain well invested in its people to retain the skills and experience needed to support market demand throughout the cycle. This, combined with lower levels of attrition across the sector, led to a 12%* increase in headcount.

To invest in future talent last year 2,573 new people were hired, 1,945 employees were promoted, and around 1,400 graduates and apprentices joined the firm. 

Investing in emerging technologies and AI

Globally, KPMG and Microsoft expanded their industry-leading cloud and AI alliance to give colleagues early access to Microsoft 365 Copilot, Semantic Kernel, and Azure OpenAI Service, for its clients across Audit, Tax and Advisory, including piloting these technologies in the UK. 

And in April 2023, a new global alliance with MindBridge brought advanced AI into the firm’s digital audits. This new alliance embeds statistical, machine learning, and rules-based analytics technology into KPMG Clara, KPMG’s smart audit platform, further enabling the identification of unexpected or high-risk transactions and helping to provide enhanced audit quality. 

Supporting our regions and communities

KPMG expanded its regional expertise for clients with its biggest innovation and technology investment in the north – through the opening of a new Ignition Centre in Manchester with £5m investment that brings together expert insights, people, and technology in a 25,000 sq ft collaboration hub. 

The firm increased its sector-leading commitment to driving social mobility in the UK by launching an ambitious new community programme in June 2023, Opening Doors to Opportunities, to provide one million young people with the opportunity to develop/shift their skills by 2030. 

And as part of the firm’s ongoing support to its communities, a record breaking 49.7% (8,592) of its people either volunteered or fundraised to support causes important to them through 105,142 volunteering hours (up from 6,149 volunteers contributing 76,780 hours in 2022). Everyone at KPMG has six days per year to volunteer.

KPMG set itself the challenge of raising £1 million in 2023 for its national charity Marie Curie and thanks to its people, the firm achieved that goal.

The firm also met its target of using only renewable electricity by 2024 with 100% of its electricity now backed by Renewable Energy Guarantees of Origin. 

Investing for future growth

As part of investing for future growth, the firm has remained steadfast over the last two years in its commitment to face into and resolve past legacy cases, with a decade worth of outstanding cases now closed. In doing this, the firm now has a strong foundation from which to grow. 

Looking ahead, to adapt to client demand, KPMG made the decision to combine its deals and consulting practice, creating one unified Advisory business. In addition, on 1 December 2023, Jon Holt announced to UK Partners that KPMG UK has begun exploratory discussions with KPMG Switzerland to merge the two firms into one combined firm. 

Jon Holt said:

“When I came in as Chief Executive, I set out a plan to invest for the long term and build a resilient, sustainable business, this includes working even closer with our global network. 

“Bringing together our two firms would give us more collective power to invest, build new services for our clients and provide our people with significant global career opportunities. Together, we would grow faster, be more profitable and do so in a sustainable way.

“The decisions we made in 2023 have been about transforming our business and putting ourselves on a strong footing that positions us for growth in 2024 and beyond.”

Metrics – financial and non-financial: 

• UK revenue grew by 9% for the financial year ending 30 September 2023, to £2.96bn with a profit before tax of £364m.
  
• Growth across capabilities was 19% for audit, 8% for tax and legal, 7% consulting, with a reduction in deal advisory of 6% reflective of market conditions.
  
• Average partner distribution of £786,000 ** 
  
• The firm has 833 equity and salaried partners and 17,239 employees. ***
• The firm’s colleagues are: 49% female; 32% are from an ethnic minority background; 7% are Black Heritage; 4% are Lesbian, Gay, Bi; 7% have a disability or a long-term condition and 20% are from a lower socio-economic background. 
  
• 22% of KPMG UK’s board are from an ethnic minority background, 22% are from a lower socio-economic background and 44% of the board are female.  
  
• KPMG UK’s Executive Committee is 44% female and 25% are from a lower socio-economic background. 
  
• KPMG remains one of the most popular employers in the UK, the firm featured in the Times Top 50 Employers for The Times Top 50 Employers for Gender Equality 2023 and also ranked in the top-five Social Mobility Employer Index compiled by the Social Mobility Foundation for the seventh consecutive year. More details on the firm’s other awards can be found here: Awards (kpmgcareers.co.uk)