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RSM Tenon heads for £2.8m profit 7 May 2013

Accountancy group RSM Tenon could post 2013 profits of £2.8m following a £5.5m arbitration settlement.

According to an interim management statement, a dispute with insurers over sharing the cost of remedial action against the Financial Services Authority (FSA) has been settled.

Chris Merry, chief executive, said: “We continue to make good progress in restoring RSM Tenon to operating profitability and to consolidate the business turnaround.

“The market for our services remains highly competitive and I am grateful to our clients and staff for their continued support.”

The company also anticipates that it will in due course be reimbursed for its costs associated with the arbitration – although no figure has been released.

Embattled RSM Tenon was fined £700,000 by the FSA in 2010 for failings in its advice and sales processes relating to products from the failed US investment bank Lehman Brothers.

RSM Tenon posted losses of £10m in February 2013 for the six months ending 31 December 2012, cutting its cost base and reducing its workforce by 500 individuals.

The interim management statement confirmed that the company has not yet reached agreement with its sole lenders, Lloyds, to reset the terms of the lending facility.

Due to its cost-cutting measures, the company’s covenants in relation to its banking arrangements were set “on the basis of a larger business” than it currently operates.

Despite no agreement being reached, RSM Tenon remains “positive” that Lloyds Bank “continues to be supportive of the continuation of RSM as a going concern.”



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