RSM Tenon looks to new chapter after £101m loss
ACCOUNTANCY firm RSM Tenon today said its past travails were “the end of a chapter” as it posted a full year pre-tax loss of £101m.
The group, which has already announced board changes and a major cost reduction programme to bring its finances under control, saw revenues shrink by 9% to £208.2m during the year.
Exceptional items of £77m – mainly due to impairment of goodwill – contributed to the £101m pre-tax loss. This compared to a pre-tax loss of £1.4m last year. The company said its underlying operating loss was £8.9m, down from a profit of £18.5m last time.
Since February the national firm, which has offices in Bolton, Chorley, Manchester and Rochdale, said it had cut around 400 people, or 12%, taking the workforce to 2,800. It has so far stripped out costs of £20m.
The firm said that despite its past it is actually in an “enviable position” with tax, audit and insolvency services all in demand. “In the niche markets we serve – particularly with SMEs – we are mainly either the market leader or number two.”
Chairman Tim Ingram said: “To say that the year ended June 30, 2012 was a disappointment would be an understatement; this year has been totally unsatisfactory for shareholders and other stakeholders.”
He added: “It was unacceptable to have allowed a situation where costs had grown to be in excess of revenues, and bank indebtedness had become a multiple of the company’s market capitalisation. Although the external economic environment has not been helpful, the main reason for this state of affairs is that the business had in the past simply not been managed in the way it should have been.
“Of critical importance are the changes that have been, and are being, made to enable the business to provide the profitable returns that it should – and can – provide for shareholders.”
New chief executive Chris Merry added: “We are focused on our clients and always put them first. We are making the right changes to bring the firm together as One RSM Tenon.
“We are in a stable financial position with bank facilities in place for the next two years. Publication of results is the end of a chapter: we are now looking forward with confidence.”
It has agreed a £93m banking facility with Lloyds that will run until the end of 2014.
