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After two profits warnings and the resignation of CEO David Eldridge in April (see Alterian releases another profits warning), marketing software firm Alterian’s hastened preliminary results for the year to 31 March, show it tumbled into the red with an operating loss of £4.37m vs. a profit of £6.6m, on revenue that fell 2.7% to £36.9m. Unsurprisingly, Alterian is now in the throes of a management overhaul, and cost cutting exercise including a 16% cut in headcount (70 people) and the closure of one office and the downsizing of two others, which should save it £6.2m in the current year.
There is also the small matter of finding a new CEO – in the meantime former non-exec Iain Johnston will take the reins under his new role as deputy chairman. Current chairman Keith Hamill has been asked to defer his retirement till a new CEO is found. Group FD David Cutler will now retire in July and be replaced with Guy Millward, who joined Alterian in February 2011. Millward, who was previously Finance Director of Kewill and of Morse, is also assuming responsibility for commercial operations, facilities, human resources and internal IT.
There are numerous other mid-management level changes taking place aimed at simplifying the organisational structure, but we still think there's a way to go. Alterian is expecting to return to growth in the current year, with revenue of £41m (11% up on FY11), and an operating margin of 6%. As things stand today Alterian will have its work cut out to achieve that kind of turnaround.
