31st Jul 2015 09:10
LONDON (Alliance News) - Management Consulting Group PLC Friday said it retains a cautious outlook as it takes step to improve its underperfoming Alexander Proudfoot business and as posted a rise in pretax profit for its first half.
The professional services company declared an interim dividend of 0.23 pence, unchanged from the previous year.
The company posted a pretax profit of GBP5.6 million, up from GBP3.8 million a year before, as revenue fell to GBP124.2 million from GBP125.0 million, but this was offset by lower cost of sales, and exceptional costs not recurring.
Revenue was hit by the strengthening of the sterling against the euro and at constant exchange rates revenue would have risen 1.5%. Foreign exchange particularly hit the company's Kurt Salmon business, which achieved revenue growth of 1% but where revenue would have risen 4% at constant currency.
Kurt Salmon accounts for three quarters of the company's revenue, and more than half of its revenues are generated in Europe. The company said that it has seen signs of improving business confidence in the French market, and elsewhere in Europe its results for the first half were encouraging.
Last month Management Consulting confirmed it had been approached and was in talks about the possible sale of some of the European operations of Kurt Salmon. Although it did not provide further details on Friday, it reiterated that there can be no certainty any deal will be concluded, or over the terms of any deal.
In its Alexander Proudfoot business, revenue fell 6%. The company has been taking measures to invest in and develop Alexander Proudfoot to try to build a "more stable and predictable" revenue base for it and drive top-line growth. In particular, it has seen improved results in its North American business, where revenue was up 25% compared to the previous six month period.
This was offset by a weaker performance in Europe, Africa and Asia, where its improvement initiatives are less advanced. Management Consulting is now taking actions to accelerate the changes in these business units.
"The changes we have made in Alexander Proudfoot's North American business unit have delivered increased revenues in that business, but the performance of the European and African operations has deteriorated, and we have not so far refilled the order book in Alexander Proudfoot at the rate required to deliver positive revenue momentum in the second half of 2015," said Chief Executive Officer Nick Stagg in a statement.
"We are taking action to accelerate changes in the underperforming operations in Alexander Proudfoot, but the board retains a cautious outlook at this stage of the year," Stagg added.
Shares in Management Consulting were down 3.1% at 15.50 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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