Tenon's share price hit by its WIP

INCREASED WORK in progress (WIP) has hit RSM Tenon's share price, according to chief executive Andy Raynor.

The stock market-listed firm posted a 65% increase in turnover for the six months ending 31 December 2010, compared to a year earlier. Profits increased 53% to £13.5m.

However, its share price fell 18% today to 43.5p. The firm's balance sheet saw assets £91.7m of trade and other receivables, compared to £63.4m a year earlier. Borrowings increase to £60.9m, from £20.7m.

Raynor said that RSM Tenon's WIP was "more than we'd liked, but now at the market norm".

Billing had stacked up towards the end of the reported period, "probably the same with our competitors". The tough housing market had led to asset realisations in Tenon's bankruptcy clients taking longer than anticipated.

He wants to return the business to the working capital control it previously had, but refusing to blame the acquisitions of RSM Bentley Jennison - and Vantis offices - on the slippage.

"We're in a market that's tough, but those deals clearly give us the capability of being more resilient," said Raynor.

Investment has been made on boosting the firm's business recovery division through recruitment, including teambuilding in former Bentley Jennison offices in Leeds and Birmingham.

For more market data go to the Share Price Centre