RSM Tenon plans to cut 10% of its staff and
merge offices to help it recover from a 9.3% drop in revenues to
£107.8m in the six months to 31 December 2011.
RSM Tenon posted an £11.4m loss compared to an
£8.5m profit for the same period a year earlier. Its results were
affected by a £60.7m goodwill charge.
RSM Tenon said the loss is mainly due to
insufficient cost savings and efficiency measures following the
acquisition of RSM Bentley Jennison and certain assets of Vantis.
It is understood the integration process in both cases failed to
adequately trim overheads and align synergies across the merged
“In particular, our cost base remains too high
and a significant part of that cost base is fixed, such that
changes to revenue have a direct impact on profitability,” RSM
RSM Tenon hopes to save £14m annually by trimming, merging and
- Initial £14m cost saving programme already under way
- Committed bank facilities of £88.0m to 31 October 2012 agreed
- Positive negotiations continue to secure long-term funding
- Revenue down 9.3% to £107.8m (2010 restated: £118.9m)
- Loss on continuing operations of £70.6m after impairment of
goodwill of £60.7m (2010 continuing loss restated: £1.9m)
- Adjusted loss per share (2.99p) (2010 restated earnings per
- Basic loss per share (21.9p) (2010 restated loss per share:
- Net debt of £76.5m at 31 December 2011 (2010: £73.3m)
- Prior year accounts adjusted which reduce pre-tax profit by
£12.1m, reflecting material errors and change in accounting
On its balance sheet, a major contributor to
RSM Tenon’s decline is a £60.7m impairment of goodwill. The London
Stock Exchange-listed company was forced to restate its accounts
for the previous year to £118.9m as a result of “significant errors
and change in accounting policy”.
RSM Tenon also owes £88m to Lloyds Banking
Group and is currently arranging new terms for committed facilities
deferring some of the payments until 31 October 2012.
RSM Tenon chairman Adrian Martin significant progress
has been made since our 23 January 2012 trading update.
“The financial review has been completed, the prior
year accounts restated, funding is in place to October and a new
chief executive has been appointed. Our executive team is fully
focused on restoring the business to profitability,” Martin
RSM Tenon has recently appointed new chief executive
Chris Merry. Former chief executive Andy Raynor and chairman Bob
Morton resigned in January following a predicted 10% slump in
revenues in the last six months of 2011.
The firm’s auditors, PwC, have issued a going concern
warning against the firm as the results were published.