Morse reports heavy losses; sells off CSTIM

Morse reports heavy losses; sells off CSTIM

UK IT services group Morse is to discontinue its Investment Management Consulting business and restructure its operations after reporting a group-wide operating loss of £17.3 million for the six months ended 31 December 2008.

On Monday, Morse sold off CSTIM to the UK arm of US management consulting firm, Navigant for £1.3 million cash and incurred an associated £14 million goodwill write-down. The firm says the remainder of the IMC business will be sold off or discontinued, and that further write-downs are possible.

Morse acquired CSTIM in April '04 for some £6m, but its revenues have declined steeply and the business reported a H1 loss.

Morse has now moved to shake up the remainder of its operations, installing a new CEO and creating four independent business units offering infrastructure services and technology in the UK, Spain and Ireland, alongside a standalone business application services division.

The restructuring will see finance director Mike Phillips take over the CEO role from Kevin Loosemore who will revert to non-executive chairman.

States Loosemore: "While we expect the market for IT services and technology to remain difficult we anticipate that changes to Morse's operating model, together with its ongoing strong client relationships, will deliver an improved underlying profitability and cash conversion in the current year and into the future."

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