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Mouchel confident while VT Group drops contract

Consultant Mouchel has posted a confident trading statement this morning, while VT Group, which seeks to buy Mouchel, lost out on a key contract.

In a trading statement to the city, released this morning, Mouchel revealed a series of new contract wins to take their order book to £2bn, up from £1.9bn on 31 July 2009.

The statement said the consultant was winning a high proportion of work, which if maintained would generate a significant revenue stream. “The bidding pipeline of near-term opportunities and contract extensions totalled £2.4bn at the half year, compared with £2.2bn at 31 July 2009. 

“This reflected the increasing number of opportunities in Government Services, given the growing trend for local authorities to look towards working in partnership with the private sector, to deliver services more efficiently,” read the statement.

Mouchel’s chief executive Richard Cuthbert spoke exclusively to NCE, slamming VT Group’s proposed takeover of Mouchel.

He told NCE that the MAC wins retained good margins: “Ours were not the cheapest bids on the table, and we won on quality,” he said.

Cuthbert also said the company had managed to claw-back some of the money owed by Dubai World. “We have either been paid or have been promised some £9M from Dubai.”

However, the fate of a second tranche of cash was still in the balance as accountants Deloitte examined Dubai World’s books and consider sales.

Cuthbert told the city: “We are delighted with the progress we have made during the first half in securing new work and overcoming the various challenges we have faced over the last year.  

“The business has regained momentum and we are well on the path to recovery. This is particularly pleasing in the face of an uncertain economic environment and the added distraction of a takeover approach. 

“We remain confident that we are pursuing the right strategy. Given the actions we have taken to strengthen the business and win new work, we are increasingly optimistic about the longer term outlook for the Group, as we return to growth in 2010/11 and beyond,” he said.

VT Group has until 8 March to either agree to buy Mouchel or walk away. It had proposed a price of 260p per share for the consultant.

Mouchel’s confidence has returned on the back of these wins. “Improved visibility from our recent contract wins and the underlying strength of both our order book and bidding pipeline, mean that we can look to 2010/11, and beyond, with increasing confidence,” read the statement.

However, the strain is beginning to show for VT Group. Yesterday it lost out on a massive £6bn helicopter PFI deal for the Ministry of Defence and Department for Transport. VT Group’s chief executive Paul Lester was reputed to be ‘disappointed’ by the news.

Recent Mouchel wins: £500M, including

  • MAC Area 1(Devon and Cornwall) - £20M-£30M per year for five years
  • MAC Area 13 (Cumbria and Lancashire) - £40M-£45M per year over five years
  • Westmister Parking Management - £12M-£13M per year
  • Dept of Health “Next Stage Review - A High Quality Workforce” scheme - £25M
  • New contracts in Abu Dhabi - £15M

 

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