TIDMMMC
RNS Number : 1131J
Management Consulting Group PLC
02 August 2012
2 August 2012
Management Consulting Group PLC Interim Results
Some progress in difficult trading conditions
Management Consulting Group PLC ("MCG" or "the Group"), the
global professional services group, today announces its results for
the half year ended 30 June 2012.
Key points
-- Revenue 6% lower at GBP146.8m (H1 2011: GBP155.6m)
-- Underlying* operating profit 23% lower at GBP11.8m (H1 2011: GBP15.3m)
-- Underlying* operating profit margin lower at 8.0% (H1 2011: 9.9%)
-- Profit for the half year of GBP4.7m (H1 2011: GBP9.1m)
-- Net debt reduced by 31% to GBP35.7m (June 2011: GBP51.7m)
-- Underlying basic earnings per share decreased to 1.3p (H1 2011: 2.4p)
-- Interim dividend increased to 0.23p per share (2011: 0.2p)
*Throughout this statement the term 'underlying' is defined as
'before non-recurring items and amortisation of acquired intangible
assets'.
Nick Stagg, Chief Executive commented:
"MCG has made progress in parts of the business in the first
half of 2012 against a backdrop of challenging trading conditions
and market uncertainty, and enters the second half of 2012 with a
healthy order book and project pipeline. We have seen a good
performance overall in North America, and in emerging markets, with
work delivered outside North America and Western Europe
representing 15% of first half revenues. This has been offset by
the negative impact of Eurozone weakness which has affected overall
activity levels and margins.
"Economic uncertainty looks set to continue in the second half
of 2012, but MCG is a global business with a balanced geographic
and sector focus. We remain committed to improving operational
efficiency and profitability, whilst investing for growth, and we
are well placed to take advantage of opportunities in markets and
sectors which continue to grow."
For further information please contact:
Management Consulting Group PLC
Nick Stagg (Chief Executive) 020 7710 5000
Chris Povey (Finance Director) 020 7710 5000
FTI Consulting (formerly Financial Dynamics)
Sue Stuart/ Victoria Foster-Mitchell/ Matthew
Cole 020 7831 3113
An analyst briefing will be held at the offices of FTI
Consulting at Holborn Gate, 26 Southampton Buildings, London WC2A
1PB on 2 August at 9.30am. For further details please contact
Victoria Foster-Mitchell on +44(0)20 3077 0486.
Notes to Editors
Management Consulting Group PLC (MMC.L) provides professional
services across a wide range of industries and sectors.
It comprises two independently managed practices: Alexander
Proudfoot and Kurt Salmon. Alexander Proudfoot develops and
implements operational improvements to its clients to increase
productivity and reduce costs. Kurt Salmon provides consultancy
services to a wide range of industries in both the private and
public sectors. The Group operates worldwide. For further
information, visit www.mcgplc.com.
Chairman's Statement
The performance of the Group's businesses in the first half of
2012 has been mixed. We have held our overall revenues broadly at
the same level achieved in the second half of 2011. We have seen a
good performance in North America and emerging markets, offset by
the negative impact of Eurozone weakness on business activity, and
some negative impact on our reported results in Sterling as a
result of a weaker Euro.
Alexander Proudfoot has continued to perform well, with
encouraging levels of activity in the natural resources sector and
in emerging markets. It is well placed to be successful in markets
where economic growth remains robust in spite of weak prospects for
growth in developed economies, and enters the second half of the
year in a promising position.
Kurt Salmon's operations in North America and Asia, mainly
focused on the retail and consumer goods sector, have performed
well. Kurt Salmon's European business had a slow start to the year
and continuing uncertainty over the future of the Eurozone has
adversely affected the French and Benelux operations in the first
half, in particular in relation to work for financial services and
public sector clients.
There are no signs that the current weakness and uncertainty in
European markets will ease in the next few months, and we must
adapt to these conditions, whilst continuing to work to develop our
businesses with selective investment and recruitment in sectors and
geographies where there are good prospects for profitable
growth.
The Group is in a strong financial position. Net indebtedness
has been reduced over the twelve months to 30 June 2012 by 31% to
GBP35.7 million, and we expect to reduce it further over the course
of the financial year. MCG's operations are profitable and cash
generative and we will continue to focus on promoting profitable
growth in the business and improving returns to shareholders.
Alan Barber
Chairman
Operating and financial review
Alexander Proudfoot
Alexander Proudfoot delivers measurable financial benefits to
its clients by developing and installing processes and programmes
to improve operations, helping companies rapidly to improve their
operating performance by increasing revenues and productivity,
reducing costs and generating incremental cash flow. Alexander
Proudfoot works side-by-side with client management to implement
sustainable changes. It helps clients across a broad range of
sectors and has a particularly strong expertise in the natural
resources, financial services and manufacturing industries. The
annualised return on investment that clients obtain from working
with Alexander Proudfoot is typically two to three times the cost
of the project.
Alexander Proudfoot has performed well in the first half of
2012. It continues to benefit from strong demand for its services
from the natural resources sector and growing opportunities in
emerging markets. The Brazilian and South African business units
have had a successful first half, with a particularly encouraging
level of work outside the natural resources sector. A new Latin
American business unit has been established in Santiago in Chile to
serve as a base for work in Spanish-speaking Latin America and is
making good progress In North America the performance of the
business has been better than the same period in 2011, but
nevertheless a little slower than expected. In Europe, Alexander
Proudfoot has been impacted by macro economic uncertainty but has
continued to benefit from opportunities to sell projects to
European headquartered businesses which are delivered in other
geographies.
Alexander Proudfoot's revenue for the first half of 2012 was in
line with the same period in 2011 at GBP44.3m (H1 2011: GBP44.4m),
and 4% higher than the preceding six month period (H2 2011:
GBP42.6m). Operating profit for the first half of 2012 was GBP5.2m
compared with an operating profit in the first half of 2011 of
GBP5.8m. The operating profit margin was 11.8% compared with 13.2%
in the first half of 2011. The slightly reduced margin reflects the
impact of the costs of establishing the new Latin America business
unit.
Alexander Proudfoot is well placed to develop further in markets
where economic growth remains robust in spite of weak prospects for
growth in developed economies. The business has a flexible approach
to resourcing client projects which enables staff to be deployed
efficiently to the geographies where the workload requires. It is
increasingly focusing on developing long term relationships with
clients and secures a significant proportion of its work from
repeat business and referrals from clients. Alexander Proudfoot
enters the second half of the year in an encouraging position and
with a healthy order book and pipeline.
Kurt Salmon
Kurt Salmon is a global management consultancy business which
partners with its clients to drive strategies and solutions that
make a lasting and meaningful impact on their businesses. Kurt
Salmon operates internationally in certain key industry verticals
and has a particular focus on retail and consumer products and in
financial services. In addition it has a number of strong regional
practices, for example in healthcare in the United States and in
the public sector in France. Kurt Salmon also provides functional
expertise to its clients, for example, through offerings focused on
Chief Financial Officers and Chief Information Officers. Kurt
Salmon now operates in 15 countries around the world, the largest
operations being in North America and Continental Europe.
Kurt Salmon's retail and consumer goods operations in North
America have performed well in the first half of 2012. The
Healthcare consulting practice in the US is making good progress
and has been enhanced by the acquisition of New Albany Healthcare,
announced on 7 June. The smaller US financial sector practice has
been adversely affected by wider uncertainty in the banking sector
driven by issues in the Eurozone. The new Kurt Salmon retail
consulting operation in China, acquired in October last year, is
making excellent progress, alongside the existing business in
Japan.
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