RSM Tenon sees profits rise but dividend cut
LISTED accountancy group RSM Tenon has reported an uplift in profits, but announced it is cutting its dividend, saying it needs to preserve resources in a time of uncertainty.
The firm, the seventh-largest in the country, said turnover in the year to June had risen 31% to £249.1m, while profits before amortisation and exceptionals rose 12% to £27.1m.
The group said organic growth has been ‘modest’ and its operating margin had fallen from 13.8% to 12.1% after being held back by the trading environment and investment in the business.
The results are the first full-year figures since the £76.3m acquisition by Tenon of RSM Bentley Jennison in late 2009. The enlarged group has two offices in Birmingham and others in Stoke, Telford and Worcester.
Commenting on the results chief executive Andy Raynor said: “The general economic climate is creating a business environment which is difficult to predict.
“However, our balanced profile of services allows us to focus on organic development, improving returns and reducing net debt. By maintaining our prudent stance we look forward to further progress.”
Chairman Bob Morton said the results had been achieved “against the background of further economic turmoil and a changing tax legislative framework.”
He said this had affected some parts of the group, but thanks to recent acquisitions now diversified and has a “balanced mix of services”.
Regarding the proposed reduction in dividend from 1.6p per share last year to 0.55p he said: “In common with all businesses, we have reviewed the need to preserve our resources during a period of unsettling events and worsening financial and economic outlook.”
Alan Webb, managing director of RSM Tenon, West Midlands, said: “The results for the West Midlands 2011 are in line with expectations and reflect our national performance. This is a fantastic achievement in what has been a difficult economic climate, and indicates that in the West Midlands, businesses are once again planning for their future, and investing in sound advice to help them grow.
“What impresses me about businesses in the region is that they are resilient. It’s been a tough few years, but I am pleased to say we are seeing new confidence in the business sector.”
He said the firm had been bolstered by new appoitnments such as tax director Iain Wright and the firm was now looking to grow its busines in international markets.
“Our international work is a significant growth area for us – and we have made some good ground over the last six months in particular. Without any doubt, our reputation is growing in that regard,” added Mr Webb.
Looking ahead, he said increased activity in corporate finance suggested there was a renewed vigour in the marketplace.
“We have seen a considerable increase in entrepreneurs looking to buy or sell, which is excellent news for the regional and national economy.
“We’ve got a great deal of respect for the range of West Midlands businesses which have negotiated the difficulties of the past three years through a combination of careful financial management, strenuous hard work and an enterprising attitude,” he said.
