LONDON (Alliance News) - Management Consulting Group PLC saw its shares fall Thursday after it reported a lower net profit for the first-half of the year, hit by steep tax charges.
The group left its interim dividend unchanged at 0.23 pence per share.
The professional services group posted a pretax profit of GBP3.7 million for the six months to June 30, up from GBP2.5 million a year earlier.
However, its net profit for the period was only GBP1.4 million, compared with GBP1.9 million in the first-half of last year, as it booked a tax charge of GBP2.3 million, compared with only GBP607,000 the prior year.
The company operates in two segments - Alexander Proudfoot and Kurt Salmon.
Revenue in the first-half came in at GBP125.0 million, up from GBP123.4 million.
"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," said Chief Executive Nick Stagg in a statement.
Its Alexander Proudfoot business, which helps clients to execute their plans and strategies by improving management effectiveness, saw a slow start to the year, and was hit the hardest by sterling strength, the group said. Alexander Proudfoot's revenue for the first-half was 9% higher than last year, at GBP31.3 million, but was 22% lower than the preceding six month period.
Its management consultancy business Kurt Salmon on the other hand performed well both in revenue and margin terms, it said, reflecting improved market conditions and a lower cost base. Kurt Salmon's first-half revenue was GBP93.7 million, 1% lower than the first-half of last year, but equal to second-half revenue in 2013.
"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," said the company.
Management Consulting shares were down 3.8% at 22.25 pence Thursday early afternoon.