KPMG Australia today announced its full year results to 30 June 2018, generating revenues of $1.64 billion, up by 9.2 percent on the previous year. The firm employed more than 7,000 people, with record intakes of both new partners and graduates.
Growth was achieved across all businesses. Management Consulting continued to be the fastest growing, with demand particularly for customer experience, business transformation, and people/culture advisory services. A healthy transaction environment drove significant expansion across the firm’s Deal Advisory business, with strong growth also achieved in KPMG’s Law practice. The firm’s mid-market Enterprise business also had a significant year, realising gains from investment.
There was strong growth in the Tax practice reflecting demand for Controversy, International Tax, Board Advisory and Tax Transformation services. During the year the firm merged its Assurance and Risk Consulting businesses to provide an end to end assurance and risk proposition to the market. The firm was selected as the global external auditor of Rio Tinto, re-appointed as the external auditor of Suncorp, and re-appointed contract audit partner for the external audit of the Reserve Bank of Australia for the ANAO. The internal audit business also had a successful year.
“We’ve had another very pleasing year, with the firm growing strongly over the last five years as we’ve transformed our business. We’ve effectively added 50 percent to the top line during this five year period, with strong bottom line growth also allowing us to fund further investments,” said Gary Wingrove, CEO of KPMG Australia. In April, Gary was unanimously re-appointed by the firm’s Board for a further term as CEO.
“During the year we aligned the firm’s structure to better address client priorities, providing broader whole-of-firm offerings and delivering technology-enabled client solutions. This positioned us successfully to provide and win multi-service work, which was often transformational in nature.”
“Clients are trying to drive growth against a backdrop of threats and challenges – with leaders being measured on their ability to deliver on transformation. Aligning ways of working, front to back technology integration, and culture are among some of the most critical elements to get right in order to deliver consistently on the digital promise our clients are making to their customers and citizens.”
Gary Wingrove added: “Client appetite for innovation and data-driven technologies, including AI, IoT and blockchain, is increasing unabated – in fact we’ve seen demand here doubling in the past 12 months. There has been a real shift in the marketplace from experimentation to implementation, driving significant demand for these services. Our focus on delivering these solutions to our clients is seeing strong growth. In addition to doubling in revenue in FY18 we have a strong pipeline of demand for finance, risk and tax services delivered under a managed service arrangement.”
KPMG Australia made four acquisitions during the year, focused on supporting clients to optimise growth and efficiency. Recognising the substantial performance impact that physical assets have for organisations, KPMG bought engineering asset management company, Relken. The acquisition of UDKU deepened the firm’s customer experience capabilities. The acquisition of Parramatta accounting firm, YCG Accountants, expanded Enterprise’s expertise and physical reach in Western Sydney.
In further enhancing its technology capabilities, KPMG Australia co-invested with other KPMG firms to acquire the Cyber and Identity and Access Management (IAM) business of Silicon Valley-based Cyberinc. The firm also took a minority stake in analytics and automation startup, Nuonic. In a market first, KPMG Australia recently announced the formation of Wiise - a new fintech solution targeting SMEs – in partnership with CBA and Microsoft. Wiise will launch initially in the Australian marketplace this month with international roll-out plans under development for 2019.
“Importantly, all parts of the firm receive funding for growth and enhancement. Recognising increased scrutiny around the world, it’s important to ensure we are investing strongly in audit quality, which we are doing,” said KPMG Chairman, Alison Kitchen, who commenced in the role in September last year.
“KPMG strongly believes that there are clear benefits to audit quality and the wider capital markets by being a multi-disciplinary firm, and similar benefits for tax and advisory in the multi-disciplinary model too.”
Elected by the partnership on a platform of public trust and diversity, one of Alison’s first actions was to oversee the appointment of two new lateral-hire partners to the KPMG National Board. Her idea is to introduce new partners to the Board at regular intervals to ensure all parts of the firm receive representation. Martin Dalgleish also joined KPMG’s National Board as its first ever external independent board member.
“To excel in today’s business environment, we need people from a wide range of backgrounds that reflect our business and our clients. We need different and robust perspectives to make sure we really interrogate our thinking about where the firm is headed,” she said.
Recognising that the diversity of KPMG’s people is vital for performance, a record number of new partners were admitted, split almost equally between internal promotions and lateral hires joining with new skill sets.
Positive progress was made towards achieving the firm’s stated target of 30 percent women in partnership by December 2020. At year end, 25.5 percent of the firm’s 553 partners were female.
Key senior partner appointments and promotions were made during the year, including Deborah Yates commencing as Head of People, Performance and Culture (PPC), replacing Susan Ferrier who commenced as Global Head of PPC. Former King & Wood Mallesons Global Managing Partner, Stuart Fuller, joined to spearhead the growth of KPMG Law. Australian Head of Healthcare, Liz Forsyth, was appointed Global Government Sector Leader while Australian Head of ENR, Ted Surette, was appointed Global Head of Power & Utilities, and Perth partner Trevor Hart as Global Head of Mining. Andrew Yates was appointed to the role of National Managing Partner, Audit Assurance & Risk Consulting. He, together with Deborah Yates, joined the firm’s National Executive Committee.
KPMG people contributed close to 30,000 hours through social impact initiatives during FY18, including more than 5,000 hours through the Jawun program, and over 15,000 hours through providing probono professional services.
Continuing its focus on Indigenous Australia, Climate Change and Skills for the Future, the firm also invested strongly in the Mental Health sector allocating almost 25 percent of all probono support. In May, KPMG released a joint report with Mental Health Australia – Investing to Save. The report outlines the economic benefits for Australia of investment in mental health reform. By investing now we can dramatically improve the mental health of our community while also generating significant savings of between $8 billion and $12 billion over the coming years.
Aligned with its focus on Climate Change, KPMG Australia also continued to reduce its carbon footprint, with a 27 percent reduction in net emissions during CY2017.
“On the back of five years of strong growth, we have a highly successful Australian business turning over more than $1.6 billion, and a range of successful investments – in our people, new capabilities, alliances and acquisitions. Our focus is to continue to accelerate that growth, knowing the confidence we have in our strategy, people and market outlook. Over the next few years, we will invest in a bigger and better way than anything we’ve done before, to support the future needs of clients,” said Gary Wingrove.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 154 countries and territories and have 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.