Recently appointed Alterian CEO Heath Davies is pushing onto a new stage of the review process aimed at getting Alterian out of trouble. Having cut costs earlier in the year (see Alterian: management overhaul and cost cutting), the focus is shifting to an examination of its position in its target markets to see if it has the right resources to make the grade.
Given Alterian’s plummeting profits over the last few quarters a review of the sales structure is an obvious area for attention but a partner review might also be on the cards. At least one important partner underwent substantial management changes during Alterian’s Q4 period and although the social media and marketing company said its fallen Q4 profits were not related to the changes, it cannot have helped.
Alterian is also reviewing its financial reporting, forecasting, revenue recognition and the valuation of intangible assets on its balance sheet – but not as a prelude to a sale – and expects the review to be complete in time for its November interims. We wonder if that reference to intangible assets means a write down and whether customer contract arrangements are still under review (see Alterian will ‘sort it’). The FYE date is also being shifted, from March to December “which will allow the Company to measure the new business structure for a full accounting period, taking into account any changes in financial measurement and customer contracts.”
The new business plans will be formally measured from January 2012. It looks like Davies is aiming to sort out Alterian’s problems this financial year, draw a line under it, and start afresh next year. It has a way to go yet but we would love to see this UK company stabilize and get back to growth.