MMC Management Consulting Group Plc

 

TIDMMMC 
 
RNS Number : 0647F 
Management Consulting Group PLC 
06 January 2010 
 

6 January 2010 
 
 
Management Consulting Group PLC 
 
 
Pre-Close Period Trading Update 
 
 
Management Consulting Group PLC ("MCG" or "the Group") issues the following 
pre-close period trading update ahead of the announcement of the Group's 2009 
preliminary results on 8 March 2010. 
 
 
Group trading 
As reported in the Interim Management Statement ("IMS") issued on 10 November 
2009, MCG expects to report revenue for the 2009 financial year in the range of 
GBP280m to GBP290m and underlying* operating profit between GBP28m and GBP30m. 
Net debt is expected to be around GBP90m. The Group is in compliance with the 
covenants under its existing banking facilities and will manage its affairs to 
ensure that this continues to be the case. 
 
 
The term 'underlying' is defined as "before non-recurring items, the 
amortisation of acquired intangible assets and the impairment of acquired 
goodwill from continuing operations". 
 
 
Trading in the three divisions of MCG remains as indicated in the IMS. Ineum 
Consulting is still performing strongly, especially in its heartland of France 
where the public sector business performed particularly well in 2009. Kurt 
Salmon Associates has seen trading recover somewhat over the past few months in 
both its businesses, consumer products and health care, and has returned to 
profit in the second half of 2009. Alexander Proudfoot has continued to operate 
at a lower than normal level, although it is beginning to see new leads that 
inspire some confidence for the Spring 2010 selling season. 
 
 
Ineum Consulting 
Mr Chiheb Mahjoub was appointed Chief Executive of Ineum Consulting on 9 
December 2009, replacing Mr Miguel de Fontenay who stepped down from that role. 
Mr de Fontenay has subsequently left the Group, along with one other senior 
manager of Ineum Consulting. 
 
 
As previously announced Mr Mahjoub was appointed to the Board of Directors of 
MCG on 10 November 2009. Under the terms of the acquisition of Ineum Consulting 
in 2006, the vendors have the right to put forward a director for appointment to 
the Board of Directors of MCG until 1 September 2010. As previously announced, 
Mr Marco Lopinto was therefore appointed to the Board on 15 December 2009 as an 
Executive Director. Mr Lopinto has been with Ineum since 2005, is responsible 
for the Strategy Practice of Ineum Consulting and plays a key role in the 
development of the Ineum Consulting business. 
 
 
Non-recurring items 
During 2009 the Group continued to restructure its business, rationalise office 
space and reduce its headcount. Currently MCG employs around 1,500 people, a 
reduction of over 35% from the 2,350 employed in June 2008. We are currently 
vacating one floor of our KSA office space in Atlanta and closing another office 
in Minneapolis. The non-recurring cost of these latest closures is GBP3.6m and 
will be recorded in the 2009 results. As a result of this the Group will benefit 
from lower rental costs of GBP0.5m per annum from 2010 onwards. 
 
 
In respect of the departure of Mr de Fontenay, the Group will be showing a 
non-recurring item of GBP1.3m. 
 
 
As a result of these major items, and the continuation of the other Group 
redundancy plans detailed earlier in the year, the total non-recurring cost for 
2009 is expected to be in the range of GBP15m to GBP16m. 
 
 
Executive Chairman, Alan Barber, commented, "2009 was a challenging year for MCG 
after the record results achieved in 2008. We took decisive action during the 
year to manage the cost base in a difficult trading environment. As a result of 
this we are expecting to post an underlying operating profit between GBP28m and 
GBP30m. We are dedicated to ensuring the business is well positioned to benefit 
from the eventual recovery in the global economy and to create long term value 
for shareholders." 
 
 
For further information, please contact: 
 
 
+-----------------------+------------------------------+--------------------------+ 
| Management Consulting Group PLC                      | Tel: +44 20 7710 5000    | 
+------------------------------------------------------+--------------------------+ 
| Alan Barber           | Executive Chairman           |                          | 
+-----------------------+------------------------------+--------------------------+ 
| Craig Smith           | Finance Director             |                          | 
+-----------------------+------------------------------+--------------------------+ 
|                       |                              |                          | 
+-----------------------+------------------------------+--------------------------+ 
| Financial Dynamics    |                              | Tel: +44 20 7269 7242    | 
+-----------------------+------------------------------+--------------------------+ 
| Ben Atwell            |                              |                          | 
+-----------------------+------------------------------+--------------------------+ 
 
 
Notes to editors: 
Management Consulting Group PLC (MMC.L) is an umbrella organisation for a 
diverse range of consulting and professional services offerings. MCG operates 
through three divisions: Alexander Proudfoot, Ineum Consulting and Kurt Salmon 
Associates. Alexander Proudfoot provides operational improvement services. Ineum 
Consulting provides consulting services with industry expertise. Kurt Salmon 
Associates provides retail and health care consulting. The Group operates 
worldwide. For further information, visit www.mcgplc.com 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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