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Managed services specialist Redcentric has opted to take drastic steps to try and get the business back on track after a set of disappointing results for its first half.Content Continues Below
The firm has parted company with its CEO and indicated that more needs to be done to return the business to organic growth.
Chris Jagusz has resigned from both from the Board and as Chief Executive with Peter Brotherton, CFO assuming the leadership responsibilies for now.
What led to that decision were the numbers for the first six months to 30 September, which saw revenues drop by 7.6% y-o-y to £47.5m and worryingly for an MSP the recurring monthly revenue slipped by 7.4% to £41.3m.
Added to that gross profits declined by £2.1m, which could have been worse if it were not for the cost cutting savings that the firm has been generating.
"Theresults announcement today, whilst showing Redcentric's resilience, does not demonstrate progress with regard to sales, delivery and execution. The Board has therefore decided that Redcentric's growth ambitions would be better served with a change of leadership. We have therefore taken the decision that Chris Jagusz will leave us forthwith. We would like to thank Chris for his efforts," said Chris Cole, chairman of Redcentric.
“During the period Redcentric has made strong progress with its programme of driving operational efficiencies, cost control and cash discipline. This work has led to a leaner, more efficient business and one that is able to respond more quickly in a dynamic industry. Despite these positives, top-line revenue performance has been disappointing and we have taken action to address this and return the business to organic revenue growth," he added.
Although there will be plenty of focus on the negatives there were also some advancements made in H1 with the firm keeping recurring revenue at 87% of total revenue, strong cash flow of £9.2m in the six months and a reduction in net debt to the tune of £5.1m.
Redcentric also managed to renew and extend some major customer contracts to 2021 and beyond and launched its managed Azure services offering during the period.
"Representing the Board’s confidence in the Company’s outlook, I am pleased to report a reinstatement of the Company’s dividend," stated Cole.