Danny McCance 18 Dec 2017 02:05pm

KPMG UK sees profits drop by almost a fifth

The gap between KPMG and its Big Four rivals in the UK widened after it reported a 5% increase in revenues but a slump in profits of 19.5%

KPMG pushed its revenue from £2.06bn to £2.17bn for the year ending September 2017.

However, the gap between KPMG and its competitors is growing. This year EY posted a revenue increase of 9.2% in October and still remained behind both Deloitte, which posted revenues of £3.38 and PwC which posted revenues of £3.6bn. This trend is mirrored on a global level.

Average partner remuneration for KPMG fell for the second consecutive year, with a 11% decrease from £582,000 to £519,000 after dropping from £623,000 in 2016, while the firm’s profit before tax and members’ profit shares fell from £374m to £301m.

Bill Michael, chairman of KPMG UK, said, “We are operating in a period of unprecedented change and this creates great opportunity for our firm. Our clients are navigating complex regulatory and geopolitical change, while technology continually reshapes and disrupts their markets. I believe KPMG has a pivotal role to play to help businesses through this period, helping them to adapt, evolve and grow.”

The firm is also lagging behind competitors in its work on closing the gender pay gap, which KPMG reported for the first time today, with the mean gender pay gap at 22.3% and the median at 22.2%.

This is 2.6% higher than EY, 4.1% higher than Deloitte and 8.6% higher than PwC – which has the lowest gender pay gap of the Big Four.

The firm reported an ethnicity pay gap of 13.9%, which was higher than rival firm PwC (12.8%), but lower than EY (17.3%).

“We are making progress but the pay gap data that we have also published today shows that, like many businesses, we need to go further to improve the gender and ethnicity balance, particularly among our senior people. Achieving this is a top priority for me and my leadership team,” said Michael.

KPMG UK’s management consulting practice was the best performing service line, reporting growth of 11%.

The audit practice also performed well, growing by 10%, while the firm became the number one auditor in the FTSE 250 and 350, securing contracts with BT, Legal and General and Micro Focus.

KPMG paid a total of £824m in tax to HMRC this year, while the firm’s chairman was paid £1.4m.