The company put its losses down to uncollected fees, particularly from clients in the Middle and Far East, as well as one-off costs from restructuring over the summer. This involved closing its US business, its executive recruitment arm and the cancellation of its contract with a public relations firm.
High-Point Rendel's four board members and up to five senior employees have agreed to forgo their salaries with immediate effect and have also provided loans to help maintain cash-flow. They will all receive the money that they are owed when the company has reduced its overdraft.
Paul Shackleton, an associate director at the company's financial adviser Bridgewell, said High-Point Rendel had suffered from being a minnow on the stock exchange. He said: "The problem is that High-Point Rendel works on projects for governments and multinational companies all over the world, meaning that its cash-flows are lumpy. On the London Stock Exchange there is not a lot of latitude on when to report – so with a small company there can be an awful lot of volatility."
The consultant is in talks with a financial institution over taking it off the stock market and going private because of fears that it could be the subject of a hostile takeover bid as its share price is so low.
The company also intends to cut down its overdraft, which stands at £3.8m, before 28 February to ensure that the facility is renewed.