Background
Mouchel Group ⧉ was a global infrastructure and business services company headquartered in Woking, United Kingdom. It provided advisory, design, project delivery and managed services across various markets worldwide, including highways and transportation, local government, emergency services, property, health, education and utilities. In June 2015, Mouchel was purchased by Kier Group for £265 million, and both the Infrastructure Services and Business Services divisions were rebranded. Subsequently, Kier sold Mouchel Consulting to WSP Global ⧉ in October 2016 and the Mouchel name was dropped, thereby ending the company's existence.
Since the company is on our list, you can expect that it was using spreadsheets to prepare the financial results and reports; specifically, an outside actuary was also involved in providing financial data, including pension fund deficits. Thus, both spreadsheet usage and outside actuarial involvement were integral components of the process for producing financial results and reports.
Incident
The group has been adversely affected by cutbacks in the public sector and in June, they had negotiated a "commercial conclusion" for a number of long-term contracts, which would lead to lower than expected profits. To mitigate this, finance director Rod Harris increased provisions against contract risks and accounting claims by £4m.
To add insult to injury, an outside firm of actuaries informed the group about an error the day before the profit warning was issued; the mistake resulted in a £4.3m write-down of Mouchel's profit. The mistake was blamed on an unspecified "Spreadsheet Error" in calculating the pension fund deficits. Consequently, the chief executive Richard Cuthbert resigned on the 6th of October and the company's share price dropped significantly.
Impact
The stock price of the company fell by nearly a third from 31p to 20.5p. While not the entire writedown was due to the spreadsheet error, we can surmise that irregularities in accounting could not have helped. Another factor could have been that earlier that year Mouchel rejected an acquisition offer at 164p a share.