Accountancy firm RSM Tenon's first quarter has seen turnover at the lower end of management expectations although it said that profitability is still ahead of the comparable period last year.
In what is traditionally the quietest quarter of its year only the most optimistic would have expected much progress in turning its business around. That said, in a statement covering the first quarter ending November 19th, the company said: "...with a continued focus on careful management of costs and as a result of the cost reduction exercise undertaken earlier this calendar year, the profitability of the group is ahead of the comparable position in the prior year and in line with management expectations."
Unfortunately, last year was a horrible one, with losses deepening to £101.8m on revenues of £208.2m.
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The company said: "The market for our services continues to be challenging. As a result, [first-quarter] turnover has been at the lower end of management's expectations."
Across its services lines the picture painted is mixed but not very inspiring. Audit, Tax and Advisory faces a "challenging market", Recovery and Corporate Turnaround "continues to see lower levels of activity than might be expected at this point of the economic cycle" while Financial Management has "traded below our expectations". Risk Management is trading "in line", while Corporate Finance has seen some "pleasing activity".
Fortunately, the company has secured new banking arrangements, that have provided increased facilities of £93m until December 31st 2014.
However, it will required far more progress in turning the business around if it is to make a dent in its high level of net debts, which stood at £78.3m at June 30th 2012.
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