KPMG UK reports 2020 annual results and outlines further plans to invest
KPMG UK reports 2020 annual results
KPMG UK today published its annual results for the financial year ended 30 September 2020.
- Firm records a resilient performance, despite COVID-19 challenges
- Announces £44m investment in technology and its office estate as the firm prepares to roll out hybrid working in 2021
KPMG UK today published its annual results for the financial year ended 30 September 2020.
Bill Michael, Senior Partner and Chair of KPMG in the UK, said: “This has been an extraordinary year. Throughout the pandemic our priority has been to protect the wellbeing of our people and maintain the long-term resilience of our firm. We have achieved that. Over the past year, our people have risen to the challenge in the face of adversity to help clients. They have continued to support each other, and our communities when they have needed us most. I am incredibly proud of their efforts.
“We started the financial year strongly, recording high single digit growth prior to the onset of the pandemic. Like many businesses, our performance was then impacted by COVID-19. However, thanks to the hard work of our people, our business has remained resilient and our financial performance robust.
“As we look ahead, we have started our new financial year strongly. Our first quarter’s performance has been positive and our sales pipeline is strong. The M&A market has resurged, and clients are resuming discretionary projects as they adapt to the changes the pandemic has brought both to their business and market. We have an important role to play to help our clients recover from the aftermath of this health crisis and rebuild their businesses for growth.”
Despite the pandemic’s impact on seven months of the firm’s financial year, revenue decreased by just 4% from £2.4billion to £2.3billion. The decrease was driven in part by the sale of the firm’s pensions business, which completed in March 2020. Excluding the disposal of the pensions business, like-for-like revenue reduced by 2%.
Underlying profit decreased by 6% year on year, from £307million to £288million, as a result of the impact of the pandemic on the second half of the financial year. As a result, average partner distribution decreased by 11%, from £640k to £572k, as the firm prioritised protecting jobs and supporting employees.
The firm’s audit practice posted 3% year-on-year growth in net sales to £606million. The tax and legal team saw a decrease in net sales of 6% to £373million. Net sales in the consulting practice and deal advisory practice both saw a decrease of 2% to £574million and £400million respectively, as clients paused discretionary projects and M&A activity slowed at the beginning of the pandemic.
Investing in our people
At the onset of the pandemic, the firm successfully moved all colleagues to remote working and introduced a special leave code, enabling its people to take unlimited paid time off to care for family and friends during the pandemic. This remains in place to support colleagues. KPMG did not furlough its staff nor access government COVID-19 loans.
The firm also continued to invest in its workforce, running recruitment and onboarding processes online, hiring over 900 graduates and apprentices, with 46% located outside of London. The firm also made 950 experienced hires during the year and recognised internal talent, promoting more than 1,800 colleagues across the business.
To support colleagues working from home and from the firm’s offices, KPMG invested in making its premises COVID-secure and bought equipment for staff to use at home, such as desks, monitors and chairs.
Future of work
The firm is now preparing for a future of hybrid working, and over the course of 2021 will roll out an additional £44million programme of investment to transform its offices and invest in new home working technology for staff.
The new hybrid working model will introduce a more flexible way of working, tailored to individuals’ roles and lives. It will see KPMG staff work part of the week from home and part in KPMG offices or at client sites. The model will also enable the firm greater access to a broader and diverse workforce.
To deliver this, KPMG is undertaking office redesigns across the country, repurposing them to focus on facilitating collaboration.
This redesign will challenge the traditional office layout, with space being repurposed to prioritise meetings, presentations and informal convening between colleagues, clients and the firm’s wider networks. Work on the offices will begin in the spring and take place over the course of the year.
KPMG will also roll out a programme of investment in technology as it upgrades its workforce’s digital tools. The firm’s colleagues will be supplied with market leading devices to enhance their experience and suit an increasingly flexible way of working.
Diversity and Inclusion
This year, in addition to its gender and ethnicity pay gap reporting, KPMG has voluntarily published its Sexual Orientation, Disability and Black Heritage pay gaps, as the firm makes further commitments to drive diversity and inclusion.
Bill Michael said: “The thousands of talented people at KPMG bring with them a multitude of perspectives and experiences. We do not want gender, ethnicity, identity, disability or background to be a barrier to anyone’s career at KPMG. That’s why we are voluntarily publishing our Sexual Orientation and Disability pay gaps for the first time. We want to be as transparent as possible on the gaps that exist and how we are closing them.
“This year, we are also publishing our Black Heritage pay gap for the first time. In July 2020, we created a five-point plan that seeks to address some of the barriers black colleagues experience at KPMG. This plan is a long-term commitment to drive forward real structural change.”
In 2020, KPMG moved its volunteering programmes online and supported over 45,000 people in local communities across the UK. KPMG UK’s charity partner, the NSPCC, received a record number of calls to Childline, while also experiencing a drop in income because of the pandemic. For that reason, KPMG has extended its fundraising partnership until 30 September 2021. The firm has now raised £1.2 million for the NSPCC, as well as over £135,000 for local charity partners during 2020.
The firm also celebrated its 150th year anniversary in 2020, culminating in a virtual visit from Her Majesty the Queen.
Bill Michael said: “The impact of the pandemic will be far reaching and long term. We are already seeing inequalities widen. As a major employer we have a leading role to play to increase social mobility, support our communities, and work with business and the public sector help the country build back better.
“The COVID-19 crisis will have a profound impact on the skills development of our young people, particularly those from disadvantaged backgrounds. We’ve adapted our education programme to reach tens of thousands of students facing significant academic and wellbeing challenges.”
Key points from the 2020 annual results:
- KPMG UK saw a decrease of 4% in revenue year on year.
- The firm has 582 partners.
- It has 15,595 full time equivalent employees.**
- 27% of KPMG UK’s board are from an ethnic minority background and 55% of the board are women.
- Total tax paid and collected totalled £834.1 million to HMRC.
- Average partner distribution decreased by 11% from £640k to £572k, as the firm moved to protect jobs and support employees.
- The Chairman’s pay was £1.7million, a reduction of 14% on prior year. (FY19: £1.98m)
- KPMG UK’s gender pay gap for colleagues and partners improved by 5.2%, decreasing to 16.9% (median) and improved by 3.2%, decreasing to 36.2% (mean).
- The firm’s ethnicity pay gap improved by 0.9% to 11.7% (median) and increased by 1.7% to 38.2% (mean). These figures include both employees and partners.
- For the first time the firm published its Sexual Orientation, Disability and Black Heritage pay gaps.
- The firm reported a 3% median and 8% mean Sexual Orientation pay gap as of April 2020, including partners. It has a 9.6% median and 39.3% mean Black Heritage pay gap as of April 2020, including partners and a 10% median and mean Disability pay gap as of April 2020, including partners.
- KPMG remains one of the most popular employers in the UK, ranking in the top 10 in the Times Top 100 Graduate Employers survey for 2020.
- The firm also ranked in the top three Social Mobility Employer Index compiled by the Social Mobility Foundation, Social Mobility Commission and the City of London Corporation. KPMG won ‘Best Community Programme’ at the Social Mobility Awards for the firm's targeted approach to addressing educational inequality.
Notes to Editors
KPMG UK’s 2020 Annual Review can be viewed in full: here
*The profit figure cited does not include the profit from the sale of the firm’s pensions business
** This number represents the average number of FTE employees for FY20. The spot count as at 1st October 2020, including our Partners, was 15,776.
|Business area||Net sales 2019||Net sales 2020||Percentage Change|
|Tax & Legal||£397m||£373m||-6%|
For more information contact:
Zoe Sheppard, Head of Media Relations, KPMG UK
Mobile: +44 (0)7770 737 994
KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff. The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020.
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