Proudfoot profits fall

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The Independent Online
Proudfoot, the worldwide management consultancy group, saw its shares slide yesterday after it warned that profits in the rest of the year would be below the first-half level. The 3.5p drop to 27p means the share price is just 8.5p clear of its all-time low and came despite news that Proudfoot had returned to the black in the six months to June.

The group, chaired until last year by Lord Stevens of Ludgate, has been hit by several profits disappointments since the shares hit a peak of over 400p in 1991. But Malcolm Hughes, the chief executive who has overseen a restructuring of the business, said he did not regard yesterday's statement as a profits warning. The first-half figures, which showed a profit of pounds 2.52m replacing losses of pounds 5.79m last time, had met expectations, he said.

However while the second-half numbers were also likely to meet expectations, the switch to lower-margin business at the group may mean that they could come in lower.

Analysts are expecting profits of around pounds 5m for the full year, which Mr Hughes said was "a realistic assessment of what is a recovery a year after the restructuring we announced at the half-way stage". He said volumes in the current year were running around 10 per cent ahead of the original budget, which envisaged 6,500 "man weeks" of consultancy or turnover of pounds 70m in 1996.

Proudfoot also announced yesterday a strategic alliance between its Philip Crosby Associates corporate training arm and Organisational Dynamics, a US training group. Net cash stands at pounds 5.9m but the group is not paying an interim dividend to preserve cash reserves.