15 Jan 2014 07:00
15 January 2014
Management Consulting Group PLC
Pre-Close Statement
Management Consulting Group PLC ("MCG" or "the Group"), the international professional services group, today provides a pre-close statement ahead of the announcement of the Group's 2013 preliminary results on 6th March 2014.
MCG expects to report revenue and underlying operating profit* for the 2013 financial year slightly below expectations.
As previously detailed, Kurt Salmon has been affected during 2013 by weak demand in France, its biggest market. Over the course of the year management took action to align resources in the French business to the reduced revenue levels, and in recent months there has been some evidence that market conditions in France have stabilised. Kurt Salmon's operations in North America and Asia, mainly focused on the retail and consumer goods sector, have performed well and most units in these geographies are expected to report increased revenues for 2013 compared with 2012. The current outlook for Kurt Salmon as a whole in the new financial year is for some revenue growth outside France and a slight improvement in operating margins.
As previously reported, after a weak first half, Alexander Proudfoot's second half performance improved and it is expected to report total revenues for the second half of the year close to those reported in the second half of 2012, together with a much improved operating profit margin. However, the year end order book position, although higher than the position twelve months ago, is lower than at the 2013 half year stage, and the rate of order intake will need to increase in the first quarter of 2014 in order to deliver material revenue growth and margin improvement for 2014 as a whole. Consequently the Board has a cautious view at this stage on the outlook for Alexander Proudfoot as it starts the new financial year.
The Board will provide a further update on trading and the outlook for 2014 in its preliminary announcement in early March 2014.
Net indebtedness expected to be reported at 31 December 2013 is approximately £40m compared with £51.7m at 30 June 2013 and £30.3m at 31 December 2012.
On 30 October 2012 MCG announced that it intended to commence a share buy-back programme to make market purchases of up to £5m of its ordinary shares over the succeeding twelve months, and on 31 October 2013 it announced that the programme would be extended for a further six months. During 2013 the Company purchased 1,549,000 of its ordinary shares of 1 pence each for a total consideration of £0.4m. In addition, during 2013 the trustees of the Management Consulting Group PLC Employee Benefit Trust purchased 1,067,000 of the Company's shares, for a total consideration of £0.3m, for use in satisfying future awards under the Company's employee share incentive plans.
\* The term 'underlying' is defined as "before non-recurring items, the amortisation of acquired intangible assets and theimpairment of acquired goodwill from continuing operations".
Nick Stagg, CEO, commented:
"Alexander Proudfoot had a difficult start to 2013, and whilst the second half performance improved significantly, the result for the year as a whole will be disappointing. The Board's efforts will focus on sustaining and improving the performance of Alexander Proudfoot for the long term, but at this stage we have a cautious view on the outlook for this business in 2014. Kurt Salmon's performance has continued to be affected by weakness in the French market, where it is a leading player in the consulting sector, but we have taken action in 2013 to adjust resources to the right level and therefore to protect our margins in 2014. Elsewhere, in our other European operations, and in North America and Asia, Kurt Salmon continues to perform well."
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 Dynamics) | Tel: +44 20 7831 3113 |
Ben Atwell, Victoria Foster-Mitchell |
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.