By Maximilian Clarke
Lowered public sector spending, coupled with a broader economic downturn have seen losses at leading infrastructure and business services firm, Mouchel, more than treble to £64.8m over the past year.
Mouchel Group Plc(LSE: MCHL) saw revenue drop back 13%, to £551.4m, at the same time as the company increased borrowing by 5%. On the company’s ‘disappointing’ performance, earnings per share plummeted from 18.9p to -0.5.
“Our results have been disappointing," said Grant Rumbles, CEO. "The economic downturn and government steps to reduce public spending have continued to influence Mouchel’s results this year. The business has suffered from disruption as Mouchel was subject to takeover speculation and from refinancing anxieties which have influenced clients’ decisions about awarding us work. Parts of our business have underperformed, notably Management Consulting and we have experienced difficulties delivering a large commission in the Middle East, which is now nearing completion. Against this backdrop, it has proved difficult to accurately forecast performance which has resulted in several revisions to our profit expectations.
“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. 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.
“Mouchel has a strong underlying business with great staff who help to transform client organisations and to deliver excellent services to the public. We have a new management team and we will take firm and decisive action to meet the challenges we face. We will work closely with all stakeholders to reduce debt, restore stability and return the business to growth.
”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."
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