KEY POINTS:
Losses at Cadmus Technology can be traced to former management, while the new year has seen the company's best ever performance, according to chairman Peter Maire.
The listed payment technology company last posted a net loss of $4.5 million for the year ending June, compared to a modest
profit the previous year of $392,000.
Maire said more than half the losses came from investigations into acquiring Intellect Holdings, while a ballooning overhead structure did not generate the sales growth needed to justify the expansion.
Revenue for the year was flat at $25.4 million. "By the end of the first quarter of the last financial year that was certainly becoming a major concern for me," Maire said.
"I could see the company really wasn't going to achieve the result either in growth top line, bottom line or actually achieve the acquisition that we were trying to make."
Maire questioned whether the company had "the management in place that could put that to bed".
Largely as a result of performance the company undertook a significant restructure, including both board and management, Maire said.
Managing director Ian Bailey and chairman Keith Phillips resigned in March, while Maire took over the chairmanship and brought in Jim Doyle - former operations manager at the Maire-founded navigation technology business Navman.
Management changes included the appointment of chief executive Julian Beavis, former Australasian vice- president for Teradata.
"It has been a costly move but very necessary move to make for the business," Maire said.
"What we really didn't have was a team with the experience to set up and run offshore markets and I think Australia was a good example."
The company's Australian operation, which accounted for less than 20 per cent of the business, had cost a lot of money to set up but had not produced the results, although it was now in the black on a trading basis, he said.
"I think the same thing with attempting the Intellect acquisition ... we just didn't really achieve an end game with that because we simply didn't have the skill set and experience to go in and acquire a company, restructure it and manage it."
Apart from the changes in personnel the basic strategy had not changed at all, he added.
"We're really on that same path which is growth by acquisition and also by entry into offshore markets."
Cadmus had not provided market guidance for the current year but the outlook was good and revenue was expected to grow. "What I can say is that month on month the last three months are better months than the company's ever done," Maire said. "So we're a long way ahead of where the business has ever been."
The possible acquisition of Intellect - which has so far cost more than $2 million - was on hold but would start again during the next few weeks, he said.
Intellect was not a healthy company but had good brand, location and attributes, he added.
There were no more management changes to be made and the firm was looking at other acquisition opportunities. "My level of confidence, well I guess perhaps the best way to spell that out is the fact that once again I bring my cheque book out, increase my stake up to 19.9 per cent.
"I'm as committed as ever, but much more committed now knowing that we've got a team in place who not only can but already is producing the results that we need."
