London: Management Consulting Group PLC (MCG) says good revenue and profit growth in the first half of 2014 have been masked by of the strengthening of Sterling.
On a constant currency basis both its operating businesses, Alexander Proudfoot and Kurt Salmon, have increased revenues, by 22% and 4% respectively, but the significant strengthening of Sterling means that Group revenues in Sterling have increased by 1% to £125.0m.
- Reported revenue 1% higher at £125.0m (H1 2013: £123.4m), 8% higher on a constant currency basis
- Underlying operating profit 3% higher at £7.2m (H1 2013: £7.0m)
- Underlying operating profit margin steady at 5.8% (H1 2013: 5.7%)
- Profit for the half-year of £1.4m (H1 2013: £1.9m)
- Alexander Proudfoot underlying operating profit margin lower at 0.4% (H1 2013:
- 3.1%) reflecting planned change initiatives
- Kurt Salmon underlying operating profit margin higher at 7.5% (H1 2013 6.4%)
- Net debt decreased to £48.0m (H1 2013: £51.7m)
Nick Stagg, Chief Executive, commented,"We have delivered an improved performance on both the top and bottom line on an underlying basis. Kurt Salmon has performed well, both in revenue and margin terms, reflecting improved market conditions and a lower cost base. As expected our first half results reflect a slow start in Alexander Proudfoot and the margin impact of the changes we have been making to build a more flexible business model focused on profitable growth.
"Our reported results have been significantly impacted by currency translation, with underlying revenue and profit growth in Euros and US Dollars in particular masked by the considerable strengthening of Sterling, a currency which represents only 7% of our revenue. Both businesses are well placed at this stage of the year for an improved second half in terms of underlying performance in line with our expectations, although we remain exposed to the risk that currency headwinds will affect year on year comparisons."