RSM Tenon share price tumbles on profit warning

(Updated) Shares in accountancy and advisory group RSM Tenon have fallen 28% after the company announced it expects to report a loss for the second half of 2011.

The group was trading at 8.25p at the beginning of the day but, by 11am, had fallen 28% to 5.90p.

This morning RSM Tenon announced Andy Raynor is to step down as chief executive officer and Bob Morton is to leave his role as chairman with immediate effect.

Adrian Martin, currently deputy chairman and CFO, has been appointed executive chairman.

In a trading update this morning, RSM Tenon said it expects revenues in the six months to 31 December 2011 will be about 10% lower than in the corresponding period in the previous year.

As a result, and due to the proportion of its costs that are fixed, it said it expects to record a loss before tax in the period.

There is "increased sensitivity to and pressure on pricing" while transaction-based activities remain behind its expectations in a "difficult economic environment", it said in the statement.

Adrian Martin, executive chairman, said: "The company's performance is clearly disappointing and my immediate priority is to instigate and execute the necessary actions to improve profitability and cash generation.

"RSM Tenon has a strong market position and client base, as well as dedicated and loyal employees. The Board remains confident of the future prospects for the company and that a successful turnaround can be delivered."