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Mouchel eyes restructure after losses grow

Mouchel chief executive Grant Rumbles has pledged an aggressive restructure at the company which could see more redundancies after the firm posted a £64.8 million loss for 2011.

Posting its annual accounts ended July 2011 to the Stock Exchange today, the support services company reported a fall in turnover to £551.4m, compared with £632.6m in 2010, and a loss of £64.8m, compared with £14.7m last year.

Mr Rumbles, who took over after Richard Cuthbert resigned in October, described the results as disappointing, hit by the economic downturn and disruption within the company which has prevented clients from awarding the firm work.

He said: “I will be looking at the group’s business and strategy over the coming months and will focus on cash, our costs and our clients.

“I will be reviewing every aspect of our business, including the markets we operate in, our operating model and the management structure. I will be looking aggressively at our cost base and particularly at our supporting functions and central overheads. I know that we can do much better.”

The firm has net bank borrowings at £87.7m, compared with £83.4m. It said it secured a new debt deal with the banks until 31 March 2014 yesterday, including a £129m term loan and a £35m revolving credit facility.

Mouchel has already sold its rail and pipeline design and energy business to repay some of its debts. The run up to the results saw a profit warning and the resignation of two chairmen.

Mr Rumbles said:  “We have a new management team and we will take firm and decisive action to meet the challenges we face. We will work closely with all stakeholders to reduce debt, restore stability and return the business to growth.”

Contract wins have included a contract with the Highways Agency (HA), in joint venture with Thales, to run the National Traffic Information Service (NTIS), worth £28.5m to Mouchel over seven years; a  five-year extension to a business process outsourcing partnership with Middlesbrough Council worth around £70m and a partnership contract with Bournemouth Council for support services worth £148m over 10 years.

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