RSM Tenon's result bolstered by audit arm
Audit and financial management help firm increase turnover by 31%
RSM TENON has seen a massive 31% increase in turnover, largely bolstered by its audit division.
The better than expected result, consists of £249.1m turnover compared to £190.4m for the previous year.
The audit division pulled in revenues of £121.3m for the year to 30 June 2011 with an underlying profit of £23.4m, compared to £89.5 for the same period last year and an underlying profit of £17.3m.
Another department that boosted the firms growth was financial management which increased its profit margin to £7.3m compared to £3.9m last year, risk management also grew its profits to £4.2m from £2.7m.
Adjusted pre-tax profits rose to £27.1m from £24.1m in 2010 and underlying profit increased to £30.1m, up 14% from £26.3m the previous year.
This is a marked improvement from what analysts had predicted would be a pre-tax profit of £26.58m, according to Thomson Reuters.
Despite the good result RSM Tenon said it will remain cautious in the future, adding its net debt had grown to £65.7m from £43.1m with new banking facilities of £88m.
The recovery division saw its profit margin slump. In 2011 recovery racked in £52m in revenues with a £8.3m underlying profit, against £51m revenues and £11.4m of underlying profit in 2010. The slump is attributed to a lower than expected work flow of corporate and personal insolvencies.
Specialist tax advice also saw a decline in its revenue to £15.1m from £19.1m with underlying profits falling to £3.4m from £4.9.
The firm said it is reducing its dividend to 0.55p from 1.6p, a company statement said the change would allow the firm to preserve resources in an unpredictable business environment.
This is the first full year of trading since the acquisition of RSM Bentley Jennison in 2009 and certain assets of former listed rival Vantis, last year.
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Andy Raynor, (pictured) RSM Tenon CEO, said: “The general economic climate is creating a business environment which is difficult to predict.
“However, our balanced profile of services allows us to focus on organic development, improving returns and reducing net debt.By maintaining our prudent stance we look forward to further progress.”
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