RSM Tenon chairman Tim Ingram called the year to 30 June 2012 “totally unsatisfactory”, but promised shareholders that changes were being made to return the firm to profitability. With the listed accountancy firm’s shares trading at around quarter (£6.38) of their price a year ago (£24-£28), its results for the year showed revenue down 8.8% to £208.2m, with a total loss on ordinary activities before tax of £101.8m; the £88.7m loss reported was lessened by a £13.5m deferred tax credit on the loss for the year. Exceptional costs incurred in the year included £4.3m arising from reduction in its headcount of 400 staff (where costs were down £9.7m to £155.6m compared to 2011); another £4.3m to fund a regulatory change programme that was imposed in 2010 by the FSA for the firm’s misspelling of Lehman Brothers products; £3.6m in professional fees arising from the business turnaround; and an extra £1.4m provision to cover deferred considerations arising from its acquisition of Bentley Jennison. The biggest single exceptional item was a £63.7m write-down of the carrying value of its goodwill, which it pointed out was a non-cash cost. “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,” said Ingram in the firm’s statement to investors. “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.”
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.