The results tally with a downbeat trading statement issued by the company in February, warning that project delays and cancellations by investment banking clients would lead to bigger-than-expected losses for the half year to August 2002.

With a £16 million cash pile from the sale of its TCA Synergo business, the group is well cushioned to ride out the current downturn but needs to demonstrate a clear strategic direction for the future. Recently a new chief executive, Andrew Jurczynski, joined the company. Additionally, the group has realigned its business around three market niches: trading and operations in the wholesale and investment banking sector, wealth management and retail digital finance. The chairman's statement also references a move toward creating stronger partnerships with leading software product suppliers, and particularly identifies joint activities with IBM around the Websphere product line.

TCA Consulting revenues for the period to 28 February 2002 amounted to £6 million, resulting in an operating loss of £2.2 million before restructuring costs of £0.3 million (2001: nil) and exceptional items of £0.6 million (2001:nil). This compares to revenues of £16 million and an operating profit of £1.8 million in the first half of last year, which benefited from the significant impact of one particularly large project.

After interest income of £0.4 million (2001: £0.3 million), the pre-tax loss and loss per share before exceptional items were £1.8 million and 2.4p and after exceptional items were £2.7 million and 3.6p respectively. This compared with a profit of £2.2 million and earnings per share of 2.6p in the first half of last year.

In the statement from group chairman Sir Colin Southgate, the company has implemented a number of cost reductions, with staff numbers down from 171 to 146 at the period end, and to 137 subsequently. However, the firm has endeavoured to maintain fee earning capacity in order to respond to project opportunities when they arise.

Operating cash outflow in the period was restricted to £0.2 million (2001: £1.8 million inflow), which was covered by interest receipts of £0.4 million (2001: £0.3 million). Cash balances reduced from £18.6 million at the year end to £16.7 million due to corporation tax payments of £1.3 million, ESOP share purchases of £0.2 million, capital expenditure of £0.1 million and dividend payments of £0.5 million.

The directors have declared a maintained interim dividend of 0.6p per share payable on 6 June 2002 to shareholders on the register on 10 May 2002.

Southgate commented: "Fee and utilisation rates remain under pressure in what continues to be a highly competitive market environment and the board believes that this will continue to impact revenues in the short term. However, the restructuring of the business and the reduction in the cost base are expected to lead to some improvement in performance as the second half progresses."