23rd Apr 2018 17:53
LONDON (Alliance News) - Management Consulting Group PLC on Monday said it anticipates to report a decline in 2017 revenue, and that it is actively considering raising new funds.
The consulting company expects to report revenue for 2017 of GBP35.1 million, down compared with GBP45.2 million the prior year. Annual underlying operating loss is expected to narrow to GBP8.3 million from GBP8.8 million.
This will be a result the cost reduction programme, the group said, which helped to cut operating costs by 20% year-on-year.
However, after non-recurring items, including impairments against intangible assets, Management Consulting said it predicts a retained loss of GBP31.0 million, massively widened from GBP100,000 loss in 2016.
The professional services provider had previously flagged at the time of its interim results in August that it had made changes in its North America operations, but it is "taking more time than originally anticipated".
Also, the company said the worse performance reflects the investment in and progress made at Proudfoot implementing its new offering and strategy in Europe, Asia and key sectors such as Natural Resources.
Looking ahead, the group said that it remains confident to deliver sustainable improvement and change for its customers after Proudfoot grew revenue in the first quarter of 2018 compared with a particularly low fourth quarter of 2017.
Despite this, Management Consulting said it expects Proudfoot revenues for 2018 to be lower than reported last year.
The company said it continues to reduce costs across the group as a whole.
In addition the group said that it remains uncertain regarding its short-term funding position and the release of funds over the Kurt Salmon business disposal in 2016.
The Kurt Salmon retail & consumer goods business was sold at the start of November the prior year for net proceeds of GBP124.1 million, which was followed by a GBP75.0 million shareholder return. In early 2016, the French Kurt Salmon business was sold for GBP58.6 million and the healthcare unit was sold for net proceeds of GBP6.2 million.
As a result, the group was actively considering fundraising options and its major shareholder, BlueGem Capital Partners LLP, which currently holds 24% interest, agreed to the group's financing of GBP3.5 million.
The company said it had GBP16.1 million in cash as at the end of March including GBP6.0 million in respect of the Kurt Salmon escrow funds.
Shares in Management Consulting closed 16% down at 5.00 pence per share on Monday.
Related Shares:
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