Consultant Mouchel has today unveiled a new deal with its banks that keeps the company in business, but warned of further wholesale review of its business to further cut costs.
The consultant has already cut staff, sold off its rail and energy businesses and closed offices after running into serious financial trouble in October.
But new chief executive Grant Rumbles today said more sell-offs and job losses would come as he attempts to put the firm back on to a sound financial footing.
“I joined Mouchel as chief executive with the aim of putting this business back on a firm footing, so we can move forward with the confidence to deliver on behalf of all our stakeholders,” he said. “I will be looking at the Group’s business and strategy over the coming months and will focus on cash, our costs and our clients. I will be reviewing every aspect of our business, including the markets we operate in, our operating model and the management structure. I will be looking aggressively at our cost base and particularly at our supporting functions and central overheads. I know that we can do much better.”
“Whilst the outlook is challenging in the short term, I believe that Mouchel has strong underlying businesses that can deliver real and sustainable value to all stakeholders,” he said.
Mouchel’s new deal with its banks will cost it up to £10.25M in fees. It consists of a £129M loan until March 2014 and a £51M revolving credit facility.
It was announced alongside grim results for the year to 31 July that showed turnover down to £551Mm from £633M. The firm made a pretax loss of £64.8M compared to £14.7M last year.
The average number of staff employed during the year fell from 10,425 to 9,402.
Worse is to come as the firm warned: “The Board’s expectations for the outcome for the current year, compared with 2011, are significantly reduced.”