Tenon halts acquisitions

The firm, which issued a profits warning in January, suggesting profits for 2001 will be between £500,000 and £1m against an expected £6m, has been surprised at the level of difficulties encountered after acquiring 16 firms in 13 months.

Tenon FD Jonathan Freedman said of its acquisition trail: ‘We’ve paused for breath, and are now concentrating on pulling together what we have.

We have a lot to digest, but I would be surprised if we never made another acquisition again.

‘We have taken a big bite and are now taking time to digest before taking a second bite. Some of the businesses we have acquired have been more open to change than others.’

But Tenon chief executive Ian Buckley has continually predicted the 2002/03 financial year will be the time for the firm to demonstrate its capabilities, and he has maintained the integration process would take time and require a lot of internal focussing.

Many in the City believe confidence in the Tenon management has plummeted since the profits warning, with a turnaround in attitudes only likely when the firm begins to demonstrate profit.

Stuart Duncan, who works for Tenon’s broker Newmis, said: ‘Tenon’s share price has slipped back and it is encompassing integration problems.’

Meanwhile, Tenon’s shares have plunged dramatically since 11 September, reaching 62p. Today the stock had made a slight improvement climbing to 67.5p.

At the beginning of last September, its shares had been valued at 137.5p, while it floated with shares valued at 100p.

The low price is putting the firm off from making acquisitions as the stock of its shareholders such as Jupiter and Fidelity would become diluted.

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