Morse 2009 financials show improvements

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Morse 2009 financials show improvements

Microscope contributor

Morse's turnaround plan is slowly paying off as it emerged the fiscal 2009 accounts have returned to the black.

At the same time, the consultancy and reseller has confirmed that it is to sell off the operations in France - the last part of its Investment Management Consultancy (IMC) arm - to the country management team, subject to shareholder approval.

 What a difference a year makes; despite a near 10% fall in sales to £211.9m for the 12 months ended 30 June 2009, Morse made an operating profit of £200k compared to losses of £4.7m a year earlier. Gross profits fell 15.4% to £44m.

Charges for exceptional items were £8.3m for the year compared to £13.4m in fiscal 2008. A £1.4m profit from continuing operations was overshadowed by a £13.5m loss from discontinued operations, taking the yearly loss to £12.1m.

The UK Infrastructure Services and Technology business saw sales fall to £114.2m from £131.4m, while the unit remained largely flat on last year in Europe. The Business Applications division saw sales drop to £40.3m from £46.1m.

"The year under review has seen significant improvements in Morse as a business and a strengthening of the senior management team," said chief executive Mike Phillips, acknowledging the appointment of group FD Guy Millward.

It has been a year of change as Morse entered into a cost reduction programme, parted company with long term board director Duncan McIntyre, restructured the business and broke up IMC.

"The revised operational structure makes the products and services we offer clear to our clients, suppliers, staff and shareholders. All our businesses have made significant progress in reducing their cost bases," he added.

The sale of shareholding in France for £131k marks yet another step in reshaping the organisation.

The firm was recently involved in acquisition talks with several interested parties but revealed last month those discussions have been terminated.

However, the private equity owners Gartmore are understood to be keen on a sale with the market expected to be tough in the calendar year ahead for all in the channel.

"We expect the market for IT services and technology to remain difficult and we will have to continue to be vigilant on costs while keeping the businesses focused on their propositions," said Phillips.

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