Support services group Mouchel has gone into meltdown after an accounting error caused an £8.6m blow to its profits, resulting in its shares plummeting.
On the discovery of an error made by a client’s actuaries, and an over-optimistic expectation of contract settlements, chief executive Richard Cuthbert tendered his resignation on 6 October. The company share price then dropped by a third, leaving its equity value at just £19.4m by the end of last week.
The outside firm of actuaries told the group about the error the day before the profit warning - that a spreadsheet error meant a pension fund deficit had been wrongly valued. Around £4.3m of Mouchel’s profit write-down has been attributed to this error.