Investors in Mouchel dumped their stock on the company's latest warning that all options being considered to turn it around ‘will result in there being only limited value for existing shareholders’. This latest alarm bell sent Mouchel's shares down 31% to just 4 pence. Mouchel had warned in March that it is considering a ‘significantly dilutive’ equity raise (see Mouchel’s downward spiral continues), but this is clearly even worse news.
Mouchel also warned that the current year financial performance will be impacted by costs related to on-going operational restructuring and the anticipated financial restructuring.
Management are attempting to put a brave face on things with comments like the 'underlying business continues to perform well despite the on-going uncertainty around the balance sheet', and there assurances that once the business has been restructured it will be profitable and cash generative. Mouchel also reorganised into two separate business divisions infrastructure services and business services with a new MD from BT to run the latter division (see here), in an effort to simplify its operating structure.
But this all appears to be too little too late. Mouchel’s credibility as a going public concern is clearly in tatters. The best Mouchel can now hope for is find a buyer/s for the two divisions once the financial restructuring has been completed, and once all problem areas have been ironed out. But how long this could take is anyone's guess, all the while the outlook is increasingly bleak.