Tough first half for Charteris

Redundancy costs of £320,000 nearly wiped out interim pre-tax profits at business and IT consultant Charteris.

The acquisitive AIM-quoted company, which offers public and private sector clients specialisations in such fields as enterprise resource planning, e-commerce and business change, made £353,000 in the six months to January, against £666,000 a year earlier, before redundancy costs and a £17,000 share-based payment charge took the pre-tax figure down to a mere £17,000. Continuing revenues fell six per cent to £10.5 million, but Charteris was able to increase overall revenues 3.5 per cent to £11.6 million thanks to the contribution of enterprise resource planning concern SIG, bought for £1.9 million in September.

The company, which funded that deal with a £2.5 million mortgage on its London head office, ended January with £1.2 million net cash, down from £2.5 million at its July financial year-end. First-half earnings fell from 1.09p to 0.03p a share.

Chief executive officer David Pickering says Charteris is weathering the recessionary storm better than some thanks to its presence in the public sector, where demand has been strong for its services in secure government. He also cites new orders from local and regional government.

According to Pickering, the company’s long-term relationships with clients in the retail and distribution sectors have helped to some extent, though competition and price sensitivity are keener than in more benign business climates. Charteris seek to help clients improve their efficiency and, argues Pickering, ‘clients will spend to save’.

But he concedes they are taking longer to take decisions to spend. ‘Our pipeline is good, but when will clients make up their minds?’

With analysts going for breakeven in the second half-year, full-year profits will be well down on 2007-08’s £1.3 million pre-tax. Floated at 90p nine years ago, Charteris shares now languish at 4.62p, valuing the company at almost £2 million.               

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