Board room cull at RSM Tenon

The Chairman and Chief Executive Officer at struggling accountancy firm RSM Tenon have paid the price for the company's under-performance and have quit their positions with immediate effect after the company issued another profits warning.

Bob Morton has stepped down from his role as Chairman, but will be remain on the board as a non-executive director. Deputy Chairman Adrian Martin has been appointed as Executive Chairman.

The company is on the look-out for a new chief executive after Andy Raynor stepped down with immediate effect.

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The company said revenue in the six months to 31 December was around 10% lower than in the corresponding period in the previous year, and this decline will contribute towards the company falling into the red at the interim stage.

Pricing and similar underlying trading effects account for around half of the revenue decline with the balance arising from updated accounting estimates and other matters.

The position in the first half of 2012 - the second half of the company's fiscal year - is not looking any brighter, with the company expecting sales to be down year-on-year in this period as well.

In a statement new Chairman Adrian Martin said: "The company's performance is clearly disappointing and my immediate priority is to instigate and execute the necessary actions to improve profitability and cash generation."

The company, which has previously warned that it was running out of head-room in respect of its lending facilities, is currently operating within those facilities, but is actively engaged in talks with its bankers ahead of the imminent expiration of certain banking facilities.

The shares lost a quarter of their value in the first hour of trading after the board room cull was announced, and are now down by nine-tenths over the last year.

NR