RSM Tenon shares crash as CEO exits

ACCOUNTANCY firm RSM Tenon has parted ways with its two leading executives after issuing a third results warning in two months, causing shares to crash 29 per cent.

The company is suffering from reduced sales, pressure on margins and an enormous debt pile.

RSM Tenon say sales in the six months to 31 December are likely to be 10 per cent down on the same period last year, forcing the company into the red due to high fixed costs.

The firm said chairman Bob Morton and CEO Andy Raynor had both resigned and would step down with immediate effect. Analysts said it is likely they were “pushed”.

The company’s future may now depend on agreeing new terms on its overdraft, due for renewal in July.

Shore Capital analyst Owen Jones said the firm faces higher banking costs: “The question is what price they can renegotiate with Lloyds, their sole lender. They currently pay three per cent over LIBOR and we’d expect to see their finance costs rise to around 8–10 per cent over LIBOR.”

The firm was carrying £66m of debt at the end of June 2011 and says that it continues to operate within agreed financial facilities although “headroom remains limited”.