RSM Tenon boss: 'Business is returning to operating profitability'

RSM Tenon returned to underlying EBITDA profitability in the six months ending December 31st, following a period of restructuring and cost reduction, interim results have shown.

The national professional services firm reported that underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were valued at £1.5m, representing a big improvement on the EBITDA loss of £8.2m recorded in 2011.

The company had revenue of £88.4m, down by £9.8m and operating costs of £86.9m, down by £19.5m.

The adjusted loss from continuing operations per share was 0.88p and net borrowings of £80.4m were recorded compared to total facilities of £93.0m as of December 31st 2012.

The company's headcount has also continued to reduce. During the period to December 31st 2012, the company had on average 2,666 employees. This compared to 3,166 in the previous year.

"Most of the reduction in the current financial year has been through natural attrition rather than redundancy, as we continue to shape the business to a more efficient structure," the interim statement reported.

"Headcount reductions have had an impact on revenue and consequently we approach any further reductions in staff with extreme care. Most importantly, we continue to recruit in key areas, including at Partner level, and have been delighted to welcome 247 new joiners during the first six months of the financial year."

Tim Ingram, Chairman of RSM Tenon, commented: "The significant progress in turning RSM Tenon around is evidenced by these results. The business is now smaller, better organised and properly managed. In a challenging market, we still have much to do, but the direction has been clearly set."

Chris Merry, Chief Executive Officer of RSM Tenon, said: "Markets for our services remain tough and I am grateful to our clients and staff for their continued loyalty. We are delighted that the business is returning to operating profitability and now seek a period of stability to move into a growth phase for RSM Tenon."

RSM Tenon's share price was down 4.76% to 6p at 10:55 on Tuesday.

MF