Tenon issues profits warning
Tenon, the UK's largest accountancy consolidator group, today issued a profits warning, stating it was paying the 'price of rapid expansion.'
The group, listed on the AIM stock exchange, warned that this year’s profits will be a fraction of what the market had been expecting.
As a result, Tenon shares have fallen 24% or 27p, going below the float price of 100p, to a new low of 85 1/2p, against a high 12 months ago of 174p.
Floated last year, the company has combined 16 accountancy practices over 13 months in an attempt to build a nationwide alternative to mid-tier firms including Baker Tilly and BDO Stoy Hayward.
Defiant Tenon chief executive Ian Buckley, told AccountancyAge.com: ‘We have always maintained that 2001 would be a year of coming together and 2002 will be the year of delivery. That remains the case.
‘The integration process has meant far too many senior directors have been spending time focussed internally, and not charging, while integration costs have been significant.’
Profits for 2001 will be between £500,000 and £1m against an expected £6m. Results for the year ending 31 December, are expected to be released in late February.
Buckley said that the firm was still be on track to hit analysts’ estimated profits of up to £16m in 2002 on turnover that should reach £100m by the end of the year.
He added the group was still looking to ‘selectively’ expand next year, including a move into financial services. Tenon is also known to want to expand in areas such as Glasgow and to move into locations including Leeds.
Companies are required by law to issue a profit warning if they have either price sensitive information or have put out a profit forecast that has altered due to market conditions.
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