Mouchel says trading will remain tough
TROUBLED support services firm Mouchel has said it faces “very challenging” trading conditions over the coming year.
The firm said government cuts and cost cutting measures had slashed its clients’ budgets and could further impact on its financial performance.
It also said a protracted offer period for the company, which included repeated bids from peers Costain and Interserve, had left it unable to make enough bids for new business.
Mouchel’s share price fell off a cliff after it snubbed the approaches.
It said its order book at the end of May stood at £1.5bn, down from £1.9bn at the same time a year earlier.
The firm’s debt stood at £109m at the end of last month, up from £97m at the half year.
Led by Richard Cuthbert (pictured), the firm added that it would pay back £30m of debt by the end of May next year.
“It need a rights issue or to sell something large quite quickly,” said Geoff Allum, analyst at Arden Partners.
“They could do a disposal with current management in place but whether they could do a rights issue I don’t know. They need a wholesale change of management,” he added.
Mouchel also said its finance boss David Tilston is leaving the firm after just eight months in his current role.