National accountancy and advisory firm RSM Tenon is set reduce staff numbers by 10% and close offices in a bid to make cost savings of around £14 million annually.
RSM Tenon said the savings programme, which has already begun, was necessary as it had failed to reduce costs in the aftermath of its acquisitions of RSM Bentley Jennison and national IFA Vantis.
It said: ‘We have concluded that the restructuring, cost savings and efficiency measures which followed those acquisitions were not sufficiently comprehensive and did not take full advantage of the potential synergies.’
The restructuring programme was announced after RSM Tenon posted a loss on continuing operations of £70.6 million, after impairment of goodwill of £60.7 million, for the last six months of 2011 compared to a £1.9 million loss in the equivalent period last year.
Tenon’s accounts also revealed that in the last six months of 2011 it spent a further £4.3 million on costs relating to a settlement agreed with the Financial Services Authority (FSA) after an enquiry into its financial advice arm dating back to 2010.
In February 2010 the FSA fined Tenon £700,000 for flaws with its advice on Lehman-backed structured products.
Tenon said: ‘We have recorded as an exceptional item of £4.3 million of costs arising from the settlement agreement reached with the FSA in February 2010 in the financial management service line and £1.5 million of acquisition and operational review costs resulting from ongoing actions taken in relation to acquisitions.’
The restructuring programme will cost the firm £6 million.
RSM Tenon chairman Adrian Martin said the firm had made progress since it hit the headlines it January when its share price fell 28% in a day after it issued a profit warning and the departure of its chief executive.
‘Significant progress has been made since our 23 January 2012 trading update. The financial review has been completed, the prior year accounts restated, funding is in place to October and a new chief executive has been appointed.
‘Our executive team is fully focused on restoring the business to profitability. We are grateful to all of our people for their continuing loyalty and client service.’
Following today's news shares in RSM Tenon dipped by 0.05p, or 0.8% to stand at 6.2p, well below their 12-month high of 46p.