In its annual results, it revealed that revenue has plummeted 8.8 per cent to £208.2m for the year ending 30 June 2011 following lower levels of activity. This revenue has been eclipsed by what the chairman described as an “unacceptable” spiralling of costs which has precipitated the restructure.
The group also posted an underlying operating loss of £8.9m versus an underlying operating profit of £18.5m for last year. Net debt increased to £78.3m from £68.2m the year before.
The firm said it expects its actions to reduce its cost base by £20m on an annualised basis. The principal action was to reduce headcount by approximately 400 people, or 12.5 per cent of its total workforce.
The group has made a number of key director changes aimed at bolstering performance. This includes the appointment, effective today (17 October), of Nicholas Page as a non-executive director and chairman of the Remuneration Committee.
Previously the firm has appointed Adrian Gardner as chief financial officer in October 2011, Chris Merry as chief executive officer in February 2012, and Tim Ingram as chairman in May 2012.
Commenting on the results, Mr Ingram said: “To say that the year ended 30 June 2012 was a disappointment would be an understatement; this year has been totally unsatisfactory for shareholders and other stakeholders.
“It was unacceptable to have allowed a situation where costs had grown to be in excess of revenues and bank indebtedness had become a multiple of the company’s market capitalisation. Although the external economic environment has not been helpful, the main reason for this state of affairs is that the business had in the past simply not been managed in the way it should have been.
“Of critical importance are the changes that have been, and are being, made to enable the business to provide the profitable returns that it should - and can - provide for shareholders.”
Despite the “totally unsatisfactory” results, Mr Ingram is confident that RSM Tenon will achieve full operational efficiency.
He said: “Our recent problems have therefore been around efficiency, productivity levels and effectiveness. Chris Merry and his management team have made an excellent start to addressing that challenge and we are confident that the turnaround is on course.
“Although it will take time to achieve full operational efficiency, I am confident that this will happen.”