Microgen today announced that the CEO, David Sherriff, will leave the company when the ongoing strategic review, which was announced in May, has been completed. First half figures were as expected (as covered in our Hot View of July 22nd) but at that time we expressed concern about the apparent lack of strategic review progress. This news only adds to our concern.
Microgen has been a successful company, with a strong position through its high performance Microgen Aptitude and Accounting Hub software and in servicing the Wealth Management and Banking sectors.
Even after giving back around £40m to shareholders over the past five years the company has a strong balance sheet, with net cash of £27m, and continues to generate cash as well as investing in its portfolio. The last fiscal year was disappointing with falling revenue but Microgen has the foundations for a strong and growing business.
At the half year stage the management said that the strategic review would continue for several months – but the market is moving and the share price is drifting. The sooner the management can give a clear direction, the better.
Perhaps the Boardroom departure will remove a logjam in decision making and lead to a quicker resolution. In any event, potential acquirers will be watching with interest and may take the strategic decisions out of the current management’s hands.