KPMG Australia today announced its full year results to 30 June 2019, generating revenues of $1.78 billion, up by 9 percent on last year.
Delivering the results, CEO Gary Wingrove said: “FY19 has been another good year for KPMG, marking six sequential years of growth. During the year our clients nominated their top concerns as dealing with the challenges of digital transformation, innovation/disruption, regulation and political paralysis. Looking back, these issues provided the playbook driving demand for our services over the past 12 months.”
“Importantly, we have focused on sustainable growth by investing hard and smart for the future. Healthy top and bottom line performance has enabled us to invest in the business this year more than ever. We’ve achieved record new partner and graduate hires, completed our largest acquisition – Ferrier Hodgson, opened a new remediation centre at Rhodes, and continued significant investment in Audit Quality. We also invested strongly in developing leadership capability and appointed the next generation of leaders of the firm – Paul Howes and Sarah Vega – to our National Executive Committee.”
Originally scheduled to end his 6-year term as CEO this year, Gary was unanimously reappointed by the Board for another term, extending to 30 June 2021.
KPMG Australia Chairman, Alison Kitchen said: “The Board is very proud of our results under Gary’s stewardship, and I sincerely thank everyone at KPMG for contributing. Importantly, a healthy, growing business allows us to invest to support the careers of our people, and the future needs of our clients and communities.”
“I am energised by the level of change and disruption taking place in the business sector and believe those who are resilient and open minded are best placed to succeed. Irrespective of size or the sector, businesses are increasingly placing greater emphasis on reviewing their purpose to determine how best to engage customers, employees and the community, at the same time as enhancing productivity. Crucial to this process is reflection on the myriad issues, both internal and external, that are reshaping business. With much of the thinking dominated by disruption, KPMG is well placed to help clients survive and thrive.”
“What was particularly pleasing was the spread of activities across all parts of KPMG, reflecting the success of our diversified capabilities strategy and our ability to integrate new areas to the business,” commented Gary.
All divisions made positive contributions to the firm’s results:
Management Consulting – Continued growth was driven by industry reform and clients’ digital transformation agendas. Capability was expanded through current and recent acquisitions (particularly customer experience advice through UDKU; technology and digital implementation through LOVE Agency; and engineering advisory through Relken). Other strong contributors included Digital Delta and Customer, Brand & Marketing Advisory. The firm’s public policy advisory business continued to make a positive contribution, reflecting the focus from governments and the public sector on improved citizen outcomes through transformation, digitally-enabled connected service delivery and infrastructure investment.
Audit, Assurance & Risk Consulting – The Audit practice experienced healthy growth. The firm continued to invest strongly in Audit Quality through the establishment of a dedicated Australian Audit Quality team, contributing significantly to KPMG’s Global Audit Quality Transformation Program, and development of the new KPMG Clara audit workflow which is due for release in FY20. Strong growth was driven by risk consulting, particularly advising the financial services sector. The business launched a remediation centre at Rhodes in Western Sydney to provide quick, efficient and high quality service to ensure clients’ customers are remediated quickly and accurately. RiskHub was also launched, supporting clients by outsourcing their governance, risk and compliance needs.
Deals, Tax & Legal – Strong growth was achieved across the board, with Transactions, KPMG Law, People Services and Restructuring Services the stand-out performers. The acquisition of Ferrier Hodgson created one of the country’s largest and most diverse restructuring practices. The firm also invested heavily in private equity capability and took a minority investment in leading legal tech provider, Plexus.
Enterprise – KPMG’s mid-market and family business continued its strong growth trajectory, driven by the success of tailored advisory solutions with a focus on technology enablement, and realisation of gains from the firm’s investments in Greater Western Sydney. The High Growth Ventures practice achieved significant growth in the emerging start-up sector, including through its highly successful Founders Program and the development and launch of the Automotive Intelligence Portal for motor dealers and original equipment manufacturers.
The KPMG Strategy Group and Innovation, Digital & Data businesses also grew significantly during the year.
The proportion of women partners grew to 28 percent, tracking well against the firm’s target of 30 percent women in partnership by December 2020.
“We continue to invest in engaging our people and building an inclusive culture, with our latest firm engagement scores at their strongest ever levels. Through a partnership with Heart on My Sleeve, we’ve had a heightened focus this year on mental health – which has resonated exceptionally well with our people and enabled more critical discussions on this area. We think it will have a substantial impact on leadership, our people’s experience and wellbeing,” said Gary.
Alison Kitchen noted: “A highlight for KPMG in FY19 was our public support for the Indigenous led-Uluru Statement from the Heart which further cements our commitment to reconciliation and the rights of Indigenous Australian.”
KPMG people contributed more than 30,000 hours through its Corporate Citizenship initiatives during FY19, including more than 1,000 hours through student mentoring programs, and in excess of 15,000 hours providing pro bono professional services. A third of the firm’s pro bono support was working with Indigenous organisations.
An important piece of pro bono work in FY19 was KPMG’s impact assessment of the Maranguka Justice Reinvestment initiative in Bourke. The initiative aims to demonstrate that positive outcomes and savings can be achieved by redirecting funding from crisis response to community development programs which address underlying causes of crime. It also highlighted the strengths of Indigenous led and owned programs. Key findings from KPMG’s Impact assessment included a 23 percent reduction in police recorded incidences of domestic violence, a 14 percent reduction in bail breaches, and a 31 percent increase in year 12 student retention rates.
“While our FY19 performance was robust against the backdrop of a volatile year, we anticipate FY20 to be another positive year and we will continue to invest with purpose and focus,” said Gary.
“Low interest rates, tax relief for low income households, and supportive policy settings for business investment all point to positive domestic economic outcomes in the short term. We also expect M&A transactions to lift, buoyed particularly by foreign buyers who see investments in Australia as particularly attractive given current exchange rates.”
“Looking ahead, what excites me is the optionality and choices we have to make about our future. There has never been a more exciting, or demanding time to work in professional services,” Gary concluded.
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