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Proudfoot dives pounds 5.7m into red

Proudfoot, a one-time vehicle of Lord Stevens, has been a sorry tale since 1992 when a profits warning brought to an abrupt end the heady growth rates chalked up in the late Eighties and early Nineties.

The story is all the worse for the fact that, as a management consultancy, Proudfoot aims to make money by telling others how to run their businesses better.

Despite an extensive boardroom clear-out, culminating in the departure of Lord Stevens earlier this year, there is precious little evidence of the company having much success in its aim.

Yesterday it reported a plunge from profits of pounds 6.3m to losses of pounds 5.79m in the six months to June and scrapped its interim dividend, worth 2p last year.

The shares, which hit 411p four years ago, dropped a further 2p to 37p on the news - perilously close to half the value of last year's rights offering at 60p.

Yet another restructuring is the cause of most of the damage. Redundancies, including the axing of a whole tier of senior management, along with the cost of closing several peripheral businesses, has led to a pounds 7.9m charge.

The company cites the need to conserve the net cash position, currently standing at pounds 10.2m, for the decision to cancel the dividend payment. Cash has haemorrhaged in the past six months, increasing the deficit on shareholders' funds from pounds 11.8m to pounds 19.7m.

The problems centre on the US and Mexico, where a fall in business has been exacerbated by the devaluation of the Mexican peso.

Proudfoot is pinning its hopes on a management shake-up in America led by Robert Whitby, who joins from Gemini Consulting next month. Meanwhile, the Crosby training operation, a long-running sore, has wiped out its losses in the latest period. Even so, the shares are only for the brave.