Image may be NSFW.
Clik here to view.
One statement sums it all up: “Our desired state is stable profitable growth... the goal remains to be achieved”. Revenues at business and IT consultancy, Charteris, continued to slide in FY11 (to end July). Total revenues slumped from £15.4 million to £12.5 million – a decline of 18%. Though, Charteris states that underlying trading improved in the second half compared to the first half, we’re not sure what it is counting as “underlying trading”; looking at the last four ‘halves’, revenues have been on a continued downward trajectory. The only ‘improvement’ we can see is that the sequential decline in the second half of 2011 was ‘just’ 12% compared to a 13% sequential decline in H1. Actually if you want the glass half empty view (us?), H211 revenues were actually down 23% compared to H210 (see ‘Leaves on the line’ at Charteris).
Charteris continues to face an uphill struggle and it has yet to cut costs as quickly as the decline in revenues. A weaker than expected performance in the second quarter triggered an “urgent recovery plan”, however, some of the expected savings have yet to be realised. The result is an adjusted pre-tax loss of £806K (vs. a loss of £840K in FY10) and, after exceptional, a pre-tax loss of £3.5 million compared to £1.0 million in 2010.
Chief Executive, Allan Barr, who took up the position in February this year, states that the company is “adjusting to a new, smaller and leaner reality”. One of the most significant changes (along with numerous management changes at the top) has been the restructuring into two divisions: ‘Business Consulting’ and ‘Microsoft Technologies’. It’s hard to tell from the release which division has suffered the most in these tough times. However, both have a significant proportion of revenues coming from the public sector (predominantly local government) so we suspect they have both been in decline. Charteris believes that it is on the right course to return to profitable month-on-month trading “assuming no material increase in economic pressures”. However, we suspect it will continue to face a struggle for business as local authorities continues to take a tough stance when it comes to consultancy spend.
