Proudfoot sheds 200 in cost-cutting drive
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Your support makes all the difference.PROUDFOOT, the management consultancy that specialises in giving advice about increasing workforce productivity, is to make 200 redundancies.
The job cuts represent nearly 20 per cent of the whole. The company said the move would reduce costs by between pounds 5m and pounds 10m a year, coming on top of pounds 15m worth of savings already announced.
Proudfoot's employee head-count will come down from 1,050 to 850 by the end of March 1994.
The company is chaired by Lord Stevens, who also heads United Newspapers, publisher of the Daily Express and the Daily Star. Proudfoot is suffering from a severe shortage of business, particularly in the UK and Europe.
It first ran into trouble during 1992. Pre-tax profits for the year to last December were halved. Interim profits this year tumbled to pounds 5.6m from pounds 13.2m and were depressed by pounds 19m of restructuring charges. The shares slumped from 400p early last year to a low of 59p in November.
Last December John Prosser replaced Thomas Huhn as chief executive, and in May a new finance director, Peter Gill, was appointed.
Proudfoot said yesterday: 'This reduction will better match the capability of the company to the business levels prevailing over the last six months.'
A spokesman said there would be a modest one-off cost resulting from the redundancies, but there would be a significant net gain from the first year onwards.
While releasing news of interim profits in September, the company said it would do well to match the pounds 5.6m pre-tax profit in the first half with a similar performance in the second half. The company confirmed that stance yesterday.
Panmure Gordon, the stockbroker, predicts pre-tax profits of pounds 10m for the year ending 31 December, compared with pounds 25m in 1992 and pounds 50m in 1991.
Richard Sanderson, Panmure's Proudfoot analyst, said the cost-cutting was good news but he was not changing his profit forecasts.
Shares rose 2p yesterday to 65p, equivalent to 4.5 times projected earnings per share for 1994.
(Graph omitted)
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