KPMG sees fees rise 3 per cent to £200m in northern business

An artist impression of KPMG's new HQ in Leeds
An artist impression of KPMG's new HQ in Leeds
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ACCOUNTANCY GIANT KPMG said its audit, tax and advisory services generated revenues of £200m in the North of England this year, a rise of 3 per cent on 2013.

The Big Four firm lost long-standing audit client Morrisons to rival PwC during the period, but prised Smith and Nephew from Ernst & Young, ending a 77-year relationship.

KPMG dealmakers advised on 42 transactions with a combined value of £872m, including the flotations of Safestyle and Card Factory, secondary buyout of Adler and Allan and sales of Victoria Plumb, TSC Foods and Mamas and Papas.

The firm poached BDO’s managing partner in Yorkshire Ian Beaumont to grow its mid-market and SME business and launched a new small business accounting service.

KPMG expects to relocate its 750 Yorkshire staff into its new HQ in Leeds by October and its new innovation and solutions centre, based on the Headrow, is up and running.

Chris Hearld, the newly promoted northern chairman, told The Yorkshire Post: “It’s been a good year. We have grown the top line and we have held profits together despite having made unprecedented investment.”

The firm did not break down regional profits, but said that overall UK profits before tax were down 9 per cent following investments in people, new business lines and new offices.

Average partner pay was broadly flat at £715,000.

Mr Hearld said the Yorkshire economy is performing “pretty well” and highlighted the region’s resurgent financial services industry and top two retailers, Asda and Morrisons, which although are trading in tough markets remain large and successful businesses, both as employers and supporters of supply chains.

He said the mergers and acquisitions market remains healthy and has got off to a good start in the new financial year, which began in October.

Asked if Leeds is doing enough to sell itself to investors, Mr Hearld said: “There is work being done.

“The Tour de France’s spectacular success was clear evidence that despite the best efforts of BBC’s Sports Personality of the Year we created a lot of positive images about what Yorkshire is about.”

The national broadcaster was criticised this week for its “patronising” and minimal coverage of Yorkshire’s staging of the Grand Depart, one of the largest sporting events of the year.

Mr Hearld said he is excited about the growing technology sector in Leeds. The firm is a founding partner of the ODI in Leeds, a new initiative backed by web founder Sir Tim Berners-Lee to promote the sharing of digital information held by the public sector.

Mr Hearld added: “We think Leeds has a great story to tell on data and technology. Telling the story is important, it’s long been said we can be too modest about these things.”

He said Yorkshire also needs to retain the brightest and the best from its universities and make sure they stay part of the regional economy.

“They are the people who will drive growth,” he added.

Devolution dealmaking

“The best deal is doing the right deal, not a quick deal,” when it comes to negotiating with the Government about devolved powers, according to KPMG’s northern chairman.

Chris Hearld said the sign of a successful agreement would be the ability for an authority to control spending in key areas and take back its own revenues.

The West Yorkshire Combined Authority is in negotiations with Government about gaining control of certain powers from Whitehall. A conclusion is not expected before Christmas.

Sheffield City Region announced a deal last week, which some criticised as underwhelming, though others said it was over-sold to help the Deputy Prime Minister win votes in his constituency.