Mouchel CEO quits after accounting error

UK-based support services group Mouchel overstated its profit figure by £4.3 million (€5 million) in the interim management statement it issued in June - an error that has prompted the resignation of CEO Richard Cuthbert.

In its 15 June statement, Mouchel reported that it expected a significant one-off profit on one of its long-term contracts which was worth £70 million (€81 million) to offset lower profitability than originally expected.

However, the outsourcing company, which provides services such as highway maintenance and payroll administration, said it had been informed of "an actuarial error" and the one-off gain would be £4.3 million (€5 million) lower than expected.

The company said that the development would have "an immediate and corresponding impact on the profits the group will report for the year to 31 July, 2011".

Furthermore, Mouchel also said it would have to increase its accounting provisions related to other contracts by around £4 million (€4.6 million) following a review by its finance director. It said this was in response to "the continuing challenging business environment".

Mouchel's chief executive, Richard Cuthbert, tendered his resignation on 6 October. The company said he would work with the group for a short period to ensure an orderly handover and chairman of the board of directors, Bo Lerenius, would become executive chairman until a new chief executive had been appointed.