Job losses and office closures threatened at RSM Tenon
ACCOUNTANCY firm RSM Tenon has seen a drop in revenues and an increase in debts but insists the underlying business remains resilient in a “challenging market”.
The firm, which has a number of offices in the Midlands including a large operation in central Birmingham, saw its chief executive Andy Raynor depart at the end of January as a result of “disappointing” financial performance.
Now with the release of its interim results for the six months to the end of 2011, the size of the task facing his successor Chris Merry has become apparent. Revenue is down 9.3% to £107.8m and net debt is now £76.5m compared to the 2010 figure of £73.3m.
The firm also reports a loss on continuing operations of £70.6m after impairment of goodwill of £60.7m.
Job losses and even office closures are likely as the firm tries to turn its fortunes around and make £14m worth of cost savings.
On the plus side the firm says it has agreed in principle bank facilities of £88m to October 2012 and is having positive negotiations regarding long-term funding.
Chairman Adrian Martin said: “Significant progress has been made since our 23 January 2012 trading update. The financial review has been completed, the prior year accounts restated, funding is in place to October and a new CEO has been appointed. Our executive team is fully focused on restoring the business to profitability.”
Merry added: “Our underlying business performance has been resilient in the face of a tough market environment. We have a clear action plan to drive near- term profitability and cash generation.
“The majority of our revenues and cash generation arise in the second half of our financial year and this trend is set to continue. RSM Tenon is fundamentally a sound business. It now has a solid base to build for the future and to deliver an appropriate return for shareholders.”
