Mouchel to shut 13 offices in £18m cost-cut drive

Grant Prior 11 years ago

Mouchel is restructuring the business into two main divisions – infrastructure services and business services – in a bid to save £18m in costs.

The streamlined operation will see backroom costs slashed and 13 regional offices closed with the majority of cuts made by September this year including two offices in London.

The move is designed to bring down the consultant’s debts “for the long-term viability of the business.”

Mouchel said the number of job losses would be “minimal” during the restructuring.

Total staff numbers as of January 31 this year were 8,345 compared to 9,625 in 2010.

The restructure announcement came as Mouchel slumped to a £11.6m pre-tax loss for the six months to January 31 2012 from a loss of £1.5m last time as turnover stayed steady at £270m.

The company is also looking at other fund-raising measures including a “significantly dilutive equity raise”.

Mouchel said it would also bid for fewer jobs with the aim of winning a higher percentage as the work pipeline was “cleansed” to drop by £670m to £1,507m.

The firm said: “A more focused pipeline helps us to concentrate on our most profitable opportunities.

“We will improve win rates by implementing new processes and targeting our people and resources at key opportunities. We will also bring in additional people with proven track records to improve our bid performance where necessary.”

Grant Rumbles, Chief Executive of Mouchel, said: “2012 is a year of transition for Mouchel. The first half of this financial year has remained challenging, but we are seeing signs of stabilisation in our core markets.

“We have completed our strategic review, which looks at every aspect of the business, and have started implementing the changes required to build on our market-leading positions in infrastructure and business services.

“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 is a good business, with a strong, enduring brand, and we have established that this can be a successful, profitable business with the right cost base and balance sheet.

“We continue to win important contracts such as the expansion of our contract in Bournemouth to include HR and Finance.

“We are evaluating all options for restructuring our balance sheet. These options include a significantly dilutive equity raise. The restructure is expected to be completed by the end of the 2012 financial year.”

Mouchel’s share price fell 28% in early trading this morning before recovering to show a 17% drop.

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