Management Consulting Group PLC Pre-close Statement (4606I)

TIDMMMC

RNS Number : 4606I

Management Consulting Group PLC

03 July 2013

3 July 2013

Management Consulting Group PLC ("MCG")

Pre-close Statement

Management Consulting Group PLC ('MCG' or 'the Group'), the international professional services group, today announces a pre-close statement ahead of the announcement of the Group's interim results on 1 August 2013.

The outlook for the business remains broadly as reported in our Preliminary Results statement on 6 March 2013. As expected, Alexander Proudfoot will report a weak first half performance, but we are encouraged by the current order book and pipeline in both Alexander Proudfoot and Kurt Salmon, which at this stage point to a stronger second half.

As previously reported, Alexander Proudfoot's revenue and profit performance in the first half of 2013, relative to 2012, will reflect the impact of a slow start to the year. This is largely a result of the low level of order input that was seen in the latter part of 2012 and in the early part of 2013. Alexander Proudfoot's individual client engagements are usually on a substantial scale, and as a result there can be an inherent lumpiness in the revenues of the business from quarter to quarter, and from half year to half year. So far in 2013 the rate of order intake has been significantly higher than in the second half of 2012. As a result the current order book level is more than twice that seen at the start of 2013, and at a similar level to the same period in 2012. The order book position and the pipeline of prospects at this stage of the year across all key geographies should provide a promising start to the second half of 2013, and point to a significantly stronger revenue performance over the rest of the year.

Kurt Salmon's operations in North America and Asia continue to perform well and to make progress in markets which are now showing some signs of sustained growth. In France, as previously reported, and as expected, activity levels have continued to be affected by macroeconomic weakness. We have taken further action to manage our resource levels in the French business to match expected market demand, and will continue to monitor this carefully as the year progresses. Kurt Salmon's operations elsewhere in Europe have made good progress so far this year. In overall terms, the first half revenue and profit performance of Kurt Salmon is expected to be slightly weaker than the previous year. Recent order intake in all key geographies has been encouraging, and the Kurt Salmon business has a healthy order book and pipeline of prospects at this stage of the year. We will continue to focus investment and recruitment on geographies where there are the best opportunities for growth in the medium term.

The first half of the year is typically not cash generative as a result of the timing of the payment of the Group's annual bonuses from the previous financial year. The level of cash receipts in the first half of 2013 has also been affected by the relative weakness of Alexander Proudfoot revenues in this period. As a result net indebtedness has increased at the 2013 half year compared to the end of 2012, and more so than the first half of last year. Reported net debt at the half year is likely to be approximately GBP52m. The Group continues to focus on operational cash generation to further reduce net indebtedness over the course of the current financial year.

On 30 October 2012 MCG announced that it intended to commence a share buy-back programme to make market purchases of its ordinary shares of up to GBP5m over the succeeding twelve months. Up to 2 July 2013 the Company had purchased 2.2m of its ordinary shares for a total consideration of GBP0.6m.

Nick Stagg, Chief Executive, commented:

"As we have previously indicated, our first half performance will be affected by a slow start to the year in Alexander Proudfoot and some continuing weakness in the Kurt Salmon business in France. However, the momentum of order input in Proudfoot has improved significantly and it appears well placed at this stage for a much better performance in the second half. We are taking further action to address the impact of the continuing weak economy in France, and elsewhere the Kurt Salmon business continues to perform well, particularly in North America and Asia."

For further information please contact:

 
Management Consulting Group PLC                Tel: +44 20 7710 5000 
Nick Stagg, Chief Executive 
 Chris Povey, Group Finance Director 
 
 
  FTI Consulting (Formerly Financial    Tel: +44 20 7831 3113 
  Dynamics) 
Ben Atwell, Susan Stuart

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.

This information is provided by RNS

The company news service from the London Stock Exchange

END

TSTUGUUAMUPWPGP

Management Consulting (LSE:MMC)
Historical Stock Chart
From Jun 2024 to Jul 2024