RSM Tenon sees Q1 in line with expectations

ACCOUNTANTS and business adviser RSM Tenon has said its first quarter performance has been in line with expectations and it is on track to deliver cost savings.

The group, established following the £76m acquisition by Tenon of RSM Bentley Jennison in December last year, said its full integration was expected to be complete by the end of the current calendar year.

Priorities now will see ongoing investment in the group’s Recovery business, while changes to pension legislation are expected to create opportunities for its Financial Management operation.

Commenting on the Q1 performance, Alan Webb, RSM Tenon’s regional managing director based in Birmingham, said: “Year to date trading is on track to meet market expectations for the full year to 30 June 2011. New opportunities have arisen from government announcements and changes to legislation. These changes will encourage further activity towards the second half of the year within taxation and investment planning. Increased Recovery workloads in H2 are anticipated from gains in market share and the staffing of new locations.”

In an interim management statement covering the period from July 1 to November 9, the group said the Q1 results supported market expectations for the full year and reflected business patterns. It said the Q1 period was normally the quietest for the group as it corresponded with the summer months, therefore trading is heavily weighed in favour of the second half of the year.

It said business remained resilient in its audit, tax and advisory work and also in its specialist taxation division and business from entrepreneurial clients.

Capital transaction levels are slowly returning, while core recurring fees have been consistent.

It said while industry statistics had shown further reductions in formal insolvency opportunities, the group’s focus was now on increasing market share and improving returns from investments in new locations.

Spending cuts could impact on the Risk Management service although this was likely to be minimal. It said the focus of this division remained firmly providing essential services to the public sector.

In Financial Management, it said acquisitions within the last year had created a diversified and strong business. It was now looking at growth through changes to pensions legislation.

“Over the next two years, our focus will continue to be the integration of the acquired businesses and the realisation of opportunities therein. Organic growth and margin improvement are our key aims for 2011 and 2012. Strong working capital management is in place to convert these gains into increased cash generation and improved shareholder returns,” it said.