MCHL Mouchel Group

TIDMMCHL

RNS Number : 2001U

Mouchel Group plc

19 December 2011

Mouchel Group plc

Interim Management Statement

Mouchel Group plc ("Mouchel", the "Company" or the "Group"), the consulting and business services Group, today publishes its Interim Management Statement for the period from the beginning of the financial year, 1 August 2011, to date.

Group performance

Our expectations for the year to July 2012 remain unchanged. The economic environment continues to put pressure on margins across our markets, as clients face cutbacks in spending. We have however, continued to win contracts and the actions to right-size the business are well under way, including plans to restructure the balance sheet of the Group within the first half of 2012 and return the Group to growth.

Future trading has been supported by a number of significant new contract wins (totalling GBP79M since July 2011) as well as expansions and extensions to existing contracts:

-- We commenced a four year contract with the London Borough of Croydon for a Transforming Highways Maintenance contract awarded in October initially valued at GBP18m;

-- The GBP15m combined value for the third phase New Horizon and the Thomas Fairchild School project under our ten-year Building Schools for the Future (BSF) contract with the London Borough of Hackney was awarded in August;

-- We were awarded a two year contract in August by the Department for Regional Development in Northern Ireland for circa GBP10m which is an extension under the Northern Ireland Road Service Framework contract; and

-- We have been awarded a 5 year framework contract estimated to be worth GBP16m by the Highways Agency for procurement of services for Traffic Management Technology

.

We are in discussions with Rochdale Council to mutually agree an amicable exit from our Partnership. If achieved, the order book will decrease by circa GBP130M, with negligible impact to operating profit and cash.

The future pipeline has decreased from July 2011 from GBP2.2bn to GBP1.6bn as at end of November 2011. The primary reason for the decrease was the failure to be selected for the West Sussex Council bid to provide outsourced services. This was valued at approximately GBP400m within the pipeline.

The Group retains an adequate level of cash headroom under its facilities, with net bank borrowings of GBP108m at the end of November (which compares with GBP109m at the same time last year). The average 12 month rolling net debt improved from GBP114m at November 2010, to GBP107m at November 2011. We continue to focus on opportunities to improve our cash generation and on the efficient management of working capital.

Outlook

Our expectations for the year to July 2012 remain unchanged and we expect the challenging market conditions of the last six months to continue for the foreseeable future. Our immediate priorities are to reduce our cost base, manage our cash and restructure the balance sheet, whilst helping our clients to maintain the highest possible levels of service to their customers and end-users, so that we can return the business to growth in the medium term.

For further information please contact:

Mouchel Group plc

   Grant Rumbles, Chief Executive                  01483 731731 

Rod Harris, Group Finance Director

Brunswick

   Mike Smith / Aideen Lee / Azhar Khan         0207 404 5959 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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