Financially troubled accountancy firm RSM Tenon said annual underlying operating losses widened as cost and debt levels spiralled but said, despite the torrid year, its underlying business remains resilient.
The group, which advices around 10,000 UK businesses, reported a loss before tax of £101.8m for the year ended June 30th 2012 compared to a loss of £1.49m the year before. Revenue declined 8.8% to £208.2m for the year after lower levels of activity.
RSM Tenon, which has undergone a series of management changes to improve the company's performance, said net debt increased to £78.3m from £68.2m the year before.
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The group's problems started with a profit warning in January, triggering the resignation of Chairman Bob Morton and Chief Executive Andy Raynor. In March the group axed 300 jobs after posting a £84m loss, a £60.7m impairment charge and a £12m accounting restatement. In August a regulatory investigation was launched into accounting errors discovered at the auditor.
Commenting on today's results, Chairman Tim Ingram said: "The results speak for themselves...it was unacceptable to have allowed a situation where costs had grown to be in excess of revenues, and bank indebtedness had become a multiple of the company's market capitalisation."
"Although the external economic environment has not been helpful, the main reason for this state of affairs is that the business had in the past simply not been managed in the way it should have been."
Otherwise the group said the underlying business remains resilient in a challenging market. The group has committed bank facilities of £93m agreed with final maturity on 31 December 2014.
It said annual cost savings of £20m have been completed compared to a £14m initial estimate in February.
Chief Executive Chris Merry commented: "We are making the right changes to bring the firm together as One RSM Tenon. We are in a stable financial position with bank facilities in place for the next 2 years. Publication of results is the end of a chapter: we are now looking forward with confidence".
Shares of RSM Tenon rose 1.86% to 5.480p in early London trading.
CJ
