Alterian boss quits on profits slump
Tuesday 05 April 2011
The chief executive of Alterian has left the marketing software group after it warned on profits yesterday. Analysts believe it is now more vulnerable to a takeover approach.
Alterian's shares plunged 19 per cent to 154p as the board revealed profits would be cut in half after a major client failed to renew its contract before the end of the financial year.
The news saw its long-term chief executive David Eldridge step down which, according to James Goodman, an analyst at Investec, "may appease the market to some extent". Mr Eldridge, the head of the Bristol-based group since its launch in 1997, said the annual results would be disappointing, adding he was stepping down because "I take my responsibilities seriously".
Mr Goodman said a takeover approach was now more likely for the company, which was valued at £94m after yesterday's share-price fall. "With no chief executive and a new chief financial officer, we suspect investor calls to sell the business will become louder," he said.
Alterian said it would miss the forecast revenues of between £42m and £44m by 10 per cent, because of "the deferral of a licensing contract renewal and extension with a major partner". The company would not disclose the customer's identity. Alterian had hoped the deal would be signed by 31 March, but following management changes at the client the process was delayed. The miss will almost completely translate to its pre-tax profits, which had been forecast at £8m, it warned.
"The board considers that it is likely that the contract renewal and extension will be agreed, but cannot be certain that this will happen, or of the timing of it happening," it said.
The company, which develops software that allows companies to check what is being said about them online, will further update the market in a trading statement "on or around" 18 April. Its customers include ESPN, the BBC, Dominos Pizza and Ladbrokes.
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