RSM Tenon Share Discussion Threads

[druinsky] 30/5/2012 20:19

new low today?

[still waiting] 25/5/2012 08:18

a hugely loss making business with a max'd out OD facility does not warrant this m cap..

[targatarga] 18/5/2012 14:09

Another vantis?

[imastu pidgitaswell] 18/5/2012 13:59

It's an odd statement - desperately trying to sound reassuring, but there's nothing actually to reassure about. In line with management expectations means what exactly?

They then go to comment about business is either not happening at all or is skewed towards the second half, especially the final quarter - in other words it may not happen at all. Meantime the October facility review hasn't changed, they have cut some costs (well duh...) but there is no indication of whether that cost target is still appropriate given their revenue position or how they are trading - just the 'management expectations' thing.

I guess there is not much else they can say, but can't help thinking they would have been better saying nothing at all.

[still waiting] 18/5/2012 13:52

the end cometh soon imho.

dumping continues from those who know the most.

£20m cap for a co. that is struggling to stay within its £90m borrowing facility and has had its most lucrative source of income stopped..

c'mon this is way overvalued...

[still waiting] 11/5/2012 12:56

the sell off continues, a D4E must be a real possibility here now.

write off the goodwill and this is insolvent, I just can't see any value left for pi's here..

[still waiting] 08/5/2012 11:12

had they finished the work??

with turnaround guys coming and then leaving I don't think the break up is too long away now..

increasing share sales of late gives a clue..

[dickbush] 08/5/2012 10:56

Just looked in on the discussion here because a friend of mine got a bill from RSM that was outrageous, and I have advised her not to pay it.

I love the irony "This company has serious accounting problems..."

[red dog] 04/5/2012 10:03

Don't understand rise today. Dead cat bounce. This company has serious accounting problems, clients have lost faith. How long will Lloyds support them now?

[still waiting] 03/5/2012 14:02

£80m bank od and contracting customer base is not a position of strength.

I'm expecting this to unravel shortly..

[imastu pidgitaswell] 03/5/2012 13:36

I think so.

Note the RNS about the chairman departing.

He only became Chairman in January, and is off now. Methinks he doesn't want to a current director when the balloon goes up. The many and varied woes are nothing to do with him, being a non-exec and charged with finding a CEO to sort the shambles, but he clearly regrets touching it with a bargepole, as anyone would.

Not exactly confidence-inspiring for an investor.

[edwardt] 03/5/2012 13:02

this one looks to be toast to me!

[charlie] 02/4/2012 22:01

The Times (London)

April 2, 2012 Monday
Edition 2;
National Edition

PwC comes out fighting over figures that wrecked a deal

BYLINE: Alex Spence

SECTION: BUSINESS; Pg. 33

LENGTH: 749 words

PwC is embroiled in a potentially explosive row with a client after questions were raised about its auditing, The Times has learnt.

Lawyers called in by the new management of RSM Tenon, the stricken professional services group, raised "serious concerns" about the quality of PwC's audit and advised that Tenon may have a legal claim against it, company documents reveal.

Britain's biggest accountancy firm has responded by accusing Tenon of misleading its audit team "through both omission and deliberate misrepresentation", documents show.

Ian Powell, PwC's senior partner, is understood to have met Adrian Martin, Tenon's chairman, to try to defuse the situation. Both firms refused to comment.

Tenon stunned the City in January when it revealed that its two top directors had stepped aside amid mounting losses and that it would have to restate its last full-year accounts.

The Times can reveal that the extent of its financial troubles came to light only after the listed company had been approached by a potential private equity buyer in the second half of last year.

HgCapital initially made a 43p-ashare cash offer, valuing Tenon at £140 million. However, after bringing in Deloitte, PwC's Big Four rival, to conduct due diligence, it "completely lost confidence in Tenon's historic and current financial statements together with Tenon's ability to forecast its future finances", documents show.

HgC revised its offer to 5p per share, with additional payments of £25 million to reduce Tenon's debt and £20 million to boost working capital. This offer, too, fell away because of concerns about Tenon's financial statements.

Lawyers from Reynolds Porter Chamberlain, who reviewed PwC's work, told Tenon's board: "It is remarkable to see the accounts of a public company ... audited by a Big Four firm undermined so comprehensively through pre-acquisition due diligence."

RPC claimed that PwC's failure to uncover errors in Tenon's last full-year accounts contributed to the failure of the HgC deal. They advised that Tenon may be able to seek damages from its auditor, while dividends and bonuses that would not have been paid out otherwise if Tenon's true financial position had been known were "also recoverable from an auditor".

RPC recommended further investigation of PwC's work and said that Lloyds Banking Group, Tenon's sole lender, "fully supports this approach".

PwC blamed Tenon for the errors in the accounts. In a letter to Tenon's audit committee from Bowker Andrews, a veteran partner responsible for the Tenon audit, PwC claimed that it had been given draft accounts for the year ended June 30, 2011, that included "what may have been knowingly incorrect accounting treatment".

The letter suggested that Russell McBurnie, Tenon's former finance director, was aware that the company was not properly accounting for bonuses. This has not been confirmed or denied by Mr McBurnie.

The dispute is an unwelcome distraction for Tenon's new management. In February, after bringing in Chris Merry to replace Andy Raynor, its chief executive, Tenon revealed that it had sunk to a £84 million first-half loss after taking a £61 million writedown on goodwill. It admitted to "significant errors" in its last full-year accounts.

Lloyds, which is owed about £80 million, has given Mr Merry until October to turn the company around and has parachuted in Donald Muir to help slash costs. About 300 jobs are expected to go.

Tenon's shares closed on Friday at 8½p, down nearly 90 per cent compared with the start of last year.

PwC was fined a record £1.4 million by the audit watchdog in January for failing to spot that its client JP Morgan had not properly protected billions of dollars of client money. A separate investigation is reviewing its audit of Cattles, the failed sub-prime lender.

[ny boy] 16/3/2012 11:40

Someone wants these, didn't a big player take a stake @ 22p ish?

[daz] 16/3/2012 09:28

The banking facilities were extended until October, which is some way off, so I think it's unlikely there will be a rights issue soon, as they would probably have agreed a shorter extension if so.

Whatever type of refinancing is undertaken, the company need to demonstrate a credible plan to take the business forward and the new CEO was only appointed a month ago, so I think he will be given a short period of time to come up with his plans.

I think news of a disposal is more likely in the near future.

[dugganjoe] 16/3/2012 08:50

being walked up for a rights issue imho

[daz] 16/3/2012 08:48

NYB, I see what you mean, the share price is assuming a low probability of survival at current levels, so there is plenty of scope for a re-rating on any good news.

There is of course also the chance of further bad news on trading, so the company is certainly not out of the woods yet.

To my mind, it's a classic high risk/high reward situation.

Some decent buying this morning, so there may be a chance of further gains soon.

[ny boy] 15/3/2012 12:05

Can't understand why the share price is so damn cheap, just adding more imho it's a screaming buy! Just need plenty of patience, not a day trading stock but good for medium/long term recovery.

[daz] 02/3/2012 09:05

Sustained buying this morning, not sure what's behind that but looks good for a further move up.

[daz] 02/3/2012 08:30

Think you're right ip.

While I'm not sure about a takeover, I do expect parts of the business to be sold over the coming months to reduce debt and make a refinancing more palatable to Lloyds. If they can get reasonable prices, that ought to help the share price.

[imastu pidgitaswell] 01/3/2012 21:24

That report was about three weeks ago. Dunno what happened though.

Clearly a bit of short closing and some long punting going on, will certainly follow. But buying this equity is not for me, methinks

[druinsky] 01/3/2012 18:45

Tenon accused by 'whistleblower' of breaking accounting rules

Britain's only publicly listed accountancy firm has been accused of breaching accounting rules by a former manager who claims that he was dismissed for blowing the whistle. RSM Tenon has been accused of overstating profits in its recovery business through a series of "bad practices", including prematurely recognising revenues on insolvency cases, in legal documents seen by The Times. Duncan Swift, the former head of Tenon's Southampton office, alleges that he was fired from his £230,000-a-year post in April last year after bringing the alleged bad practices to the attention of the company's board. Mr Swift, 49, has brought a claim at the Southampton Employment Tribunal in which he is seeking unspecified compensation and exemplary damages for unfair dismissal and breach of contract. Tenon denies the allegations of accounting breaches and is contesting his claim of unfair dismissal. The company asserts that Mr Swift was dismissed as part of a redundancy programme which resulted in around 100 job losses.

Jeremy Newman, a consultant to the company, said that there was no connection between Mr Swift's allegations and a shock profit warning issued by Tenon last month. Tenon's shares tumbled by nearly a third after it told investors that half-year revenues would be about 10% lower than last year and that it would report a first-half pre-tax loss. Andy Raynor, the chief executive, and Bob Morton, its chairman, stepped down. Tenon also said it may have to restate its last full-year accounts and incur a one-off charge in its latest half-year accounts. Mr Newman, a former managing partner of BDO who was brought in to advise Tenon's new leadership, said that Tenon could not give a reason for these adjustments until the company's half-year results on February 29, but said that they were not linked to Mr Swift's allegations.

Mr Swift joined Tenon from Grant Thornton in May 2010. He claims that soon after arriving he discovered numerous bad practices, which "had essentially led to the overstatement of profit in Tenon's recovery business through the false acceleration of the recognition of insolvency case revenues allied with the understatement of insolvency case costs". Mr Swift argues that he brought this to the attention of his line managers and began to try to "clean up" the division, but was fired when it became clear that the Southampton office missed its financial targets. He protested at his dismissal to Mr Raynor and Tenon's board, but his grievance was dismissed. In its defence, Tenon asserts: "The claimant was dismissed due to the poor performance of the ... businesses in Southampton combined with more general commercial pressures which required [Tenon] to make cost savings. In addition, there were concerns about the claimant's performance and his ability to lead the ... businesses in the difficult financial climate." Tenon said that it had conducted an internal investigation - reviewed by PwC, its auditors - into Mr Swift's allegations and found "that it had not acted in breach of its legal obligations as the Claimant claims".
The hearing is scheduled to finish on Tuesday.