Pre-close statement

4 July 2014

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 31 July 2014.

The outlook for the business for the year as a whole remains broadly as reported in our Preliminary Results statement on 6 March 2014. The strengthening of Sterling in 2014 versus 2013 is expected to result in the Group overall reporting first half revenues at a similar level to the first half of 2013, although on a constant currency basis both Alexander Proudfoot and Kurt Salmon have increased revenues. With over a third of our revenues derived from US Dollars and around half our revenues generated in Euros, our reported numbers are influenced by currency translation.

Kurt Salmon had a good start to 2014 and this continued into the second quarter. In our French business revenue levels have stabilised and margins have benefited from the management action taken last year to adjust resources to lower activity levels in 2013. We have seen positive underlying trends in revenue elsewhere in Europe and in North America. The current order book and pipeline are encouraging at this stage of the year.

As previously reported, Alexander Proudfoot had a slow start to the year and has been affected by currency headwinds. Reported first half revenues in 2014 are expected to slightly exceed those in the same period last year, but will not match those reported in the second half of 2013. We are making good progress with the change initiatives in the Alexander Proudfoot business that were announced earlier this year, but as expected these have adversely affected profitability in the first half of 2014. Good recent order input means that the order book is currently higher than it was at the same time last year, however at this stage the Board retains a cautious view on the outlook for Alexander Proudfoot for 2014 as a whole.

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. As a result net indebtedness has increased at the 2014 half year compared to the end of 2013, as in previous years. Reported net debt at the half year is likely to be approximately £48m. The Group continues to focus on operational cash generation to further reduce net indebtedness over the course of the current financial year.

The final dividend of 0.595 pence per share was paid on 2 July 2014 to shareholders on the register on 16 May.

Nick Stagg, Chief Executive, commented:

"The underlying outlook for the Group remains broadly unchanged from the time of our 2013 results announcement, although the negative impact of currency headwinds on our reported results has heightened as Sterling has strengthened further. We have seen positive underlying revenue trends in the Kurt Salmon business and the benefits of the management action taken in 2013. We are making progress with our planned change initiatives in Alexander Proudfoot but in the short term, as expected, these will adversely affect our margins. Alexander Proudfoot has generated better revenues in the first half of 2014 than the same period last year, but activity levels have not yet matched those seen in the second half of 2013, and we continue with a cautious view on the outlook at this stage".

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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 helps clients to embed disciplined execution in their operations to achieve growth targets, revenue and profit goals. 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.