Big four accountant KPMG has seen profits jump 27% following the first and “toughest” year of a three-year transformation plan.
The firm, which employs more than 180 staff including 12 partners and directors at the Newcastle office, announced the large leap in profits from £358m to £455m for the year ending September 30, 2013, while revenues also increased marginally by 0.4%, from £1.806bn to £1.814bn.
Advisory services saw a 15% increase in contribution to profits from £268m to £308m, while tax saw a small reduction from £141m to £140m for the time period. Audit saw the largest increase in contribution of the three functions, up 16% from £154m to £178m.
The average pay for the 583 partners in the firm, which has 10,800 staff across the UK, was significantly higher this year at £713,000, after a disappointing 2012 that saw them pocket £580,000 each.
Newcastle office senior partner Mick Thompson said the team are looking forward to the new year with confidence.
Thompson said: “Our team in Newcastle has worked hard to lay the foundations for future expansion and drive forward the transformation of the business throughout 2013.
“Mirroring the national picture, we have experienced consistent growth across our audit, tax and advisory divisions, including corporate finance and restructuring.
“We enter 2014 with confidence and a strong pipeline of activity to support private and listed corporates, as well as public sector and social housing organisations.
“The region is fired up for growth – as discovered by our recent Business Instinct Survey – with management teams looking to innovation and overseas markets for new opportunities on the back of an improved economic outlook.
“We look forward to a busy year and will be right behind the Newcastle and wider North East business community as it faces the challenges and opportunities that lie ahead.”
Simon Collins, UK chairman of KPMG, said the 12-month period had been a difficult one but good growth had been achieved, especially in sectors including SMEs and large corporate clients and technology-related issues such as cyber security and infrastructure.
He also said around £20m was being held back for investment, and that the employee bonus pool has been boosted by 20% from £61m to £73m.
Collins said: “We have completed the first and toughest year of our three-year transformation plan; getting a sustainable grip on the bottom line.
“I’m really proud that, as a result, we have generated double digit growth in profitability, which boosts us from fourth to second of our peer group.
“Improved profitability means that not only have we been able to increase our employee bonus pool but we have also reserved part of this year’s profit for investment in improving the quality and increasing the breadth of our services, with plans to invest £450m in the UK over the next three years.”