Troubled consultant may dilute shares to raise funds
Financially troubled consultant Mouchel is to restructure its business to lose two divisions and close 13 offices to get back on track as it announced a loss of £11.6m in the first six months of the year.
The firm also said it would also consider a “significantly dilutive equity raise” to give the firm a sustainable level of debt, which currently stands at £104m.
Mouchel turned over turned £270m in the six months to 31 January 2012, the same amount as it did in the same period of 2011. However, it made a loss of £11.6m, significantly up on the loss of £1.5m in the same period of 2011.
To get the business back to profitability the firm will simplify its four divisions into two, Mouchel infrastructure Services and Mouchel Business Services, which it hopes will reduce bureaucracy and delegate authority more effectively.
The closure of 13 offices will also save the business £18m in overheads.
Outlining the restructuring, Grant Rumbles, chief executive of Mouchel, said: “These changes will concentrate on simplifying our operations and significantly reducing group support costs, while improving our technical ability and client focus. The changes we are announcing today will enhance our ability to deliver operational excellence to our clients. Our lenders are supportive of our plans.”
Mouchel said it would concentrate on its core markets of highways and local government where it saw good levels of profitability.
The changes are expected to take place before the end of the 2012 financial year.