KPMG the latest of the Big Four hit by consulting revenue dive
The Australian wing of KPMG has become the latest of the country’s Big Four to report a downturn in annual revenues, slipping 3.6 percent to $2.2 billion for its 2024 financial year.
Again, the finger has been pointed at lower demand for the firm’s ‘legacy’ consultancy services – which were down a big 14 percent – due to both the federal government’s reduced spending and broader economic climate.
The consulting contraction was somewhat offset by gains in KPMG’s audit & assurance and mid-market enterprise business, respectively up by 9 percent and 13 percent, along with additional work in the energy, mining and property sectors.
“There have been difficult operating conditions globally as well as in Australia in the past twelve months,” said KPMG CEO Andrew Yates. “Overall, I’m pleased with the strength and resilience of our business and performance across our multi-disciplinary firm. That multidisciplinary model has seen parts of our firm perform differently during the cycle and balance each other out.”
As a breakdown, KPMG’s Consulting practice contributed $915 million to its $2.2 billion total (which excludes recoverable expenses), while its Enterprise, Audit & assurance, and Deal Advisory & Infrastructure divisions each brought in between $340 million and $385 million. Tax & Legal, the fifth of its primary divisions after last year’s organisational restructure, added $240 million.
Along with the broader restructure, KPMG has also recently overhauled its consulting division with a greater focus on AI and digital transformation, an $80 million cost-cutting exercise which saw the loss of approximately 200 jobs. However, the dive in government consulting work, of which KPMG was the biggest local benefactor, has been a significant factor in the revenue slide.
“Change is here to stay, and we are continually adapting and evolving to navigate market conditions,” Yates said. “2024 was a year of consolidation. To provide a platform for sustainable growth going forward, we have refreshed our strategy – aligning investment globally, anticipating future client needs, and creating an environment for everyone to innovate.”
Leadership
In governance terms, KPMG noted its number of independent board members had now expanded to three with the inclusion of Jane Hemstritch and Mike Baird, while the firm has become the first of the Big Four to seek outside assurance for the key data in its annul report, bringing in Grant Thornton to have a look over its numbers in accordance with IFRS global accounting principles.
Some of those numbers included a full- and part-time workforce tally which has dropped by more than 600 to less than 9,000 over the past twelve months, while its partnership across Australia, Fiji and Papua New Guinea has decreased slightly to below 700 (with a female ratio now above 36 percent), including the 52 local additions via recruitment and promotions made throughout the year.
