Dodging a barrage of questions from irate shareholders asking for clarity on the company's revenue and profit forecasts, new Solution 6 CEO John Gamble appealed for patience as he outlined his plans to re-invent a company that has seen its share price fall by more than 90 per cent.
"Give me a couple more months," he said, while claiming the new team had already achieved much in a very short time. While the company has admitted it will not make its predicted revenue of $400 million for 2000-2001, Gamble was reluctant to make any forecasts on the true figures until he was a bit further into his "mop-up" operation.
"For obvious reasons," he repeated, "I am limited in what I may say in relation to the Australian Securities and Investment Commission's interest in Solution 6 at the moment."
Gamble did confirm, however, that at least 150 jobs would be chopped, "but that could change by 4pm this afternoon", he added. The cuts would save the company $10 million by the end of the year. Gamble also re-affirmed his commitment to building a sound management team, with greater accountability from all senior managers, greater responsibility for profit, and more transparency.
Announcing the appointment of former One.Tel chairman John Greaves as new finance director(Greaves will also be considered for a position on the board), Gamble pointed to a number of senior positions that had already been made redundant, including those of COO and GM Asia-Pacific. He said more management positions had been, and were being, removed from the Australian operations, and that the UK managing director had been replaced.
Although the proposal to re-elect director Mark Clarkin, the sole surviving board member from the Chris "Two Bags" Tyler era, was approved, shareholders questioned the wisdom of retaining such a relic from Solution 6's disastrous recent past.
They also had much to say about the amount (as yet undisclosed) paid to chairman Brendan Redden, who recently announced his intention to retire. The resolution to re-elect Redden was withdrawn, and no decision on a new chair made. Director John Burrows is acting chairman.
But if "poor leadership in some of the business units with an inappropriate level of accountability" was a primary cause of Solution 6's negative results, it was just the tip of the iceberg, it seems. According to Gamble, an aggressive acquisition strategy of no less than 15 companies in two years has left Solution 6 with a lot of dead wood. He admitted that some of the businesses acquired, which "do not form part of today's cohesive business strategy", would be divested.
While shareholders were not privy to that information either, MICL Holdings, acquired to consolidate the company's position in the UK, and e-business software concern exo-net, look safe, with resolutions passed to issue options to specified officers.
Gamble also blamed Solution 6's woes on expenses in Australia and the UK that were "too high for the revenues in those countries". The centralised operating philosophy in Australia, also "made it difficult to discern actual business performance for some of the business units", and led to the company being "out of touch with the customer".
Gamble, who has received cash remuneration of $2 million but has agreed to forego any options package "until the board agrees on a more equitable solution", believes, however, that the "situation is by no means terminal". He's confident that solid product offerings, an outstanding worldwide team of talented IT professionals, no debt, cash reserves of $63 million, a renewed commitment from major shareholder Telstra, and 35 per cent of revenue coming from non-Australian sources, will do much to turn the company around.
Maybe that, and a dash magic from him?
Louise Weihart writes for the Industry Standard Australia.