Proudfoot makes pounds 6m back taxes provision

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The Independent Online
ALEXANDER Proudfoot, the management consultancy chaired by Lord Stevens, has made a pounds 6m provision to cover back taxes after belatedly discovering a change in tax law.

A spokesman for Proudfoot said the company had found out it owed about pounds 1m in overseas payroll taxes after a financial review. The rest of the provision should cover any interest charges and penalties that the tax authorities in the undisclosed country might levy.

The provision combined with tough trading in the US, Australia and Scandinavia to halve pre-tax profit in the half-year to 30 June. Profit fell to pounds 12.03m from pounds 23.84m in the same period of 1991.

In particular, the performance of Indevo, the Swedish management consultancy, suffered from the poor economic conditions in Scandinavia.

Undiluted earnings per share fell to 11.25p from 24.24p, but the interim dividend was held at 6p.

The company expects trading to deteriorate in the second half of 1992. But Proudfoot has a strong balance sheet with net cash of pounds 19.5m.

Proudfoot shares closed at 154p, up 10p on the day but down 244p on the year.