30 Jun 2010 07:00
30 June 2010
Management Consulting Group PLC
Pre-Close Update
Pre-Close Update
Management Consulting Group PLC ('MCG' or 'the Group') issues the following pre-close update ahead of the Group's 2010 interim results which are due to be announced on 2 August 2010.
Fundraising
Our fundraising of £25 million (£23.6 million net of costs) successfully completed earlier this month. The open offer element of this transaction was significantly oversubscribed and applications for excess shares had to be scaled back by approximately 35%. As a result Gartmore Investment Management Limited ("Gartmore") and BlueGem Capital Partners LLP ("BlueGem"), our two largest institutional shareholders, allowed their allocations to be reduced in order to satisfy, in full, the applications by MCG staff.
Trading
As reported in the prospectus published in relation to the fundraising on 1 June 2010, the climate in MCG's markets has eased from the extremely difficult trading conditions experienced in the middle of 2009.
Alexander Proudfoot has significantly more leads for new business than at any stage in 2009. It has booked and is currently working on some sizeable projects but is finding that others in the pipeline are taking longer to come to fruition and pushing back revenue. We will announce further progress in due course. In total, input at Ineum Consulting is good. However, as previously reported, the performance in France, its major market, is patchy with some sectors strong and others weaker. Kurt Salmon Associates continues to trade more profitably than in 2009, leveraging its reduced cost base to good effect. The merger between Ineum Consulting and Kurt Salmon Associates is progressing on schedule and the combined business will trade as "Kurt Salmon" from 1 January 2011.
As a result of the £25 million raised in June 2010, net debt at 30 June 2010 is expected to be in the region of £78 million. In line with the normal working capital cycle, the Group would expect to be cash generative in the second half of 2010.
Executive Chairman Alan Barber said, "As we reported in our recent prospectus the Group is now better placed to take advantage of the economic recovery as it develops. The fundraising has reduced net debt to more sustainable levels. Our new Chief Executive, Nick Stagg, who takes up the reins on 1 July 2010, will drive an organic growth strategy and further reinforce our focus on financial and operational discipline. Moreover, the significant recent support for the oversubscribed fundraising further aligns the interests of our new and existing employee shareholders, Gartmore, BlueGem and our other investors and endorses the Board's view that the future for MCG is positive."
For further information please contact:
| Management Consulting Group PLC | Tel: +44 20 7710 5000 |
| Craig Smith, Finance Director |
|
|
|
|
| Financial Dynamics | Tel: +44 20 7269 7242 |
| Ben Atwell |
|
Notes to editors:
Management Consulting Group PLC (MMC.L) provides professional services across a wide range of industries and sectors.
It comprises three independently managed practices: Alexander Proudfoot; Ineum Consulting; and Kurt Salmon Associates. Alexander Proudfoot develops and implements operational improvements to its clients to increase productivity and reduce costs. Ineum Consulting provides consultancy services to a wide range of industries in both the private and public sectors. Kurt Salmon Associates provides consultancy services to the retail and consumer products sector and to the health care provider sector. The Group operates worldwide. For further information, visit www.mcgplc.com.