Consultant Mouchel has posted a £3.5M loss for the year ending 31 January 2010, blaming ongoing ‘difficulties’ in the Middle East, forcing the company to sell its operations there.
The consultant has had a turbulent year, saying reduced activity within its Management Consulting and Rail groups also contributed to poor performance. It also said a hostile takeover approach from VT Group was a ‘distraction’ for group operation.
Turnover reduced from £365.6M last year to 312.4M in the year to 31 January 2010.
Profit before tax slumped by 28.4%, from £21M to £15M. However, exceptional items including a whopping £15M write-down for the group’s Middle East business - £10M in monies owed, and a further £5M restructuring charge, pushing Mouchel into the red with an overall loss of £3.5M.
The group does have a preferred bidder to buy its Middle East operations.
Mouchel’s chief executive Richard Cuthbert had told NCE that he expected the group to return to growth in 2011, and consequently the share price remained down a fraction of a percent to 206p in early trading.
Group figures do suggest this view carries some weight. The order book was up from £1.9bn to £2bn at half-year compared to 31 July 2009, and the bidding ‘pipeline’ stood at £2.3bn, up from £2.2bn at 31 July 2009.
The group’s margin also reduced from 6.8% to 6.3%, and net debt increased from £111.6M to £115.7M.
Chief Executive Richard Cuthbert, said: “We have performed well in a difficult economic environment, particularly in our core BPO and highways businesses. In the run up to AMP5, we have successfully tendered for new opportunities with the UK water companies.
“We have also made good progress in addressing the priorities we set ourselves last summer to restore the Group’s momentum.
“However, trading in the Middle East has again been difficult - we have therefore taken action to reduce our risk and negotiations are now at an advanced stage to dispose of our business in the region.
“In our core UK businesses, we are not short of opportunities and with the increased certainty that will follow the general election, we remain increasingly optimistic about the Group’s longer-term prospects,” he said.
- Revenue fell from £365.6M to £312.4M
- Profit before tax and exceptional items fell 28.4% to £15M
- The highways division performed well, increasing turnover from £118.5M to £123.6M
- In Government Services, revenue decreased from £148.6M to £141.8M
- Regulated Industries revenue decreased from £98.5M to £47.0M
- Middle East write-downs: £15M
- Other write-downs: £3.5M
- Net debt: £115.7M
- £12.8M owed in Middle East at 31 July 2009 - one-quarter of this now received
- Total loss: £3.5M