RSM Tenon dives after Morton walks out

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The Independent Online

Shares in the accountancy group RSM Tenon fell 29 per cent yesterday after its chairman, Bob Morton, and chief executive, Andy Raynor (pictured), resigned, and the firm issued a profits warning.

Tenon, whose clients include the livestock breeding company Genus, will post a loss for the first half thanks to "pricing pressure".

It also said a review of financial accounts by the new finance director, Adrian Gardner, will trigger extra, one-off charges.

No reason was given for Mr Raynor's and the City veteran Mr Morton's resignation. The latter's departure was a particular blow, since Mr Morton's moves are closely followed by retail punters.

Those tracking his investments enjoyed a doubling of shares during his time at the defence contractor ArmorGroup, which is now owned by G4S.

Tenon's shares, which have fallen by two-thirds in the past three months, dropped 2.4p to close at 5.85p yesterday. Mr Morton, who will remain on the firm's board, still has an 8 per cent stake in the business. Tenon said Adrian Martin, the deputy chairman, would be promoted to executive chairman, while it searched for a new chief executive.

The firm has hired Jeremy Newman, a former chief executive of the accounting giant BDO, but only as a consultant.

His role, Tenon said, is "to assist the board and management in developing a strategic plan to improve significantly the [firm's] performance and financial position".

Tenon also warned that revenues in the last six months of 2011 would be 10 per cent lower than the same time a year earlier, and said it was postponing its interim results to the end of February to allow time to complete various reviews.

The accountant admitted that headroom on its banking facilities was limited and that it was talking to its sole lender, Lloyds, about the expiry of banking facilities this summer.

Mr Martin said: "The company's performance is clearly disappointing."