The situation surrounding Marlborough simply goes from bad to worse and last week's results from the recruitment group show that the company is in a shocking state.
Possibly the most shocking aspect of the results was the "impairment provision" that meant that there was a goodwill write-off of €15.7 million. In plain English that means that the company accepts that it spent way too much on its spree of acquisitions since it went public.
No doubt Ann O'Brien and Dolores Mullen - not to mention Robert Walker and David Hamill who pocketed more than £20 million (including £10 million in cash) when they sold their company to Marlborough - won't be too concerned about that overspending. But Marlborough's shareholders have every reason to wonder exactly how the company has been run that it has ended up in its current dire situation.
The interim accounts were prepared on a going-concern basis, but that did not stop auditors Chapman Flood Mazars warning about the "fundamental uncertainty" surrounding the group. Preparing accounts on a going-concern basis means that the company believes it will be able to generate sufficient funds from its operations and other sources.
It has to be said, however, that the auditors, while warning about fundamental uncertainty, stopped short of qualifying the accounts.
At the end of the half-year, shareholders' funds were down to €8.8 million (£6.93 million), and all of the bank facilities - some €26.6 million according to the half-year balance sheet - are repayable on demand. As Davy's Stephen Furlong put it: "It is likely that significant restructuring, downsizing and disposals will be required over a short-time scale".
Against that sort of background, it's hardly surprising that David McKenna decided not to go ahead with his planned management buyout. With their €26 million repayable on demand, it's hard to see bankers clamouring to lend the few million he would have needed to fund the MBO. And is it any wonder that chairman Clive Brownlee and non-executive director Irial Finan jumped ship when the MBO flopped?
Shareholders have the dubious pleasure of an e.g.m. in the next couple of months, which was called to approve Paul Kavanagh's appointment to the board. With the shares down from a high of €5.35 to just €0.33 that should be an entertaining event.
