23rd Nov 2015 08:50
LONDON (Alliance News) - Management Consulting Group PLC on Monday said it is advanced talks to sell part of its Kurt Salmon business for around GBP60.0 million in cash, as it said trading for its Alexander Proudfood business has worsened, while conditions at Kurt Salmon have continued to improve.
The company said it is in talks with Solucom SA, the French consulting business, to sell parts of Kurt Salmon in France and other geographies for GBP60.0 million in cash, which Management Consulting said would be used to pay down its debt pile.
The group said the deal will allow the company to rebalance its portfolio, cutting exposure to the tough French market and refocusing the business on the North American and Asian markets. The remaining Kurt Salmon consulting business will focus on the retail and consumer goods industries, along with its US healthcare business.
The group will make a loss on the sale of the business and, if the deal completes, it will not be able to pay the interim dividend it declared in July. It expects to book an exceptional loss on the sale of the assets of around GBP50.0 million for the year.
Management Consulting said the Kurt Salmon business did improve in the third quarter to the end of September, though revenue and margins were lower. The group expects the solid underlying trends in the market will translate into a better performance in the fourth quarter and into 2016.
Alexander Proudfoot, the company's other consulting business, struggled in the third quarter, hit by weak order intake and a deteriorating performance in its North American business. The group now expects its second half revenue for Alexander Proudfoot to be significantly lower than the first half.
Shares in Management Consulting Group were down 9.1% to 13.64 pence on Monday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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