The severity of the credit crunch has surprised senior management at Morse, which today posted results for the fiscal first half year and named Mike Phillips as chief executive to oversee the continued turnaround of the business.
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For the six months to 31 December, the UK integrator come reseller posted a pre-tax operating loss of £17.3m compared to a profit of £6.4m a year earlier and saw revenues slide 7.5% to £114.4m.
"Whilst we expected the market for IT services and technology to remain difficult, we did not fully anticipate the extent to which the credit crunch would impact businesses globally," said Kevin Loosemore, executive chairman at Morse.
"This means that we have to continue to remain vigilant on costs whilst keeping the business focused on their new propositions," he added.
The UK Infrastructure and Technology division generated sales of £57.2m, £17.3m of which came from services. In the education space, Morse has made the sales and management team redundant and will review the business after performing below expectations.
In Europe, the Irish and Spanish operations broke even in tough markets but the latter is set for a further restructuring in the second half of the year and it will incur a charge of up £1.7m.
As revealed by Microscope, Morse has sold off its loss making investment management consultancy (IMC) formerly known as CSTIM to Navigant Consulting and is reviewing the other operations in that portfolio.
The company is now split into four business units; Infrastructure Services and Technology in the UK, Ireland and Spain and Business Applications Services.
These units will now report to former finance director Mike Phillips who has become chief executive. Loosemore, will become non-executive chairman when a new financial controller has been put in place.
In July, Morse embarked upon a cost reduction programme in July last year - 241 staff left the firm in fiscal H1 - and it anticipates this will cost up to £8.5m in the current fiscal year but reckons this will be recouped in less than one year.