New endeavour for Morse chief as eg solutions’ losses widen

STAFFORDSHIRE financial software supplier eg solutions is hoping a new chairman and a focus on growth will lead to a change of fortunes after the firm saw full year pre-tax losses widen to £1.48m.

The Dunston firm has endured a difficult year following its tie-in with US reseller Aspect including a succession of management changes and other upheavals.

Overall gross margin for the year fell to 45.8% (2012/13: 49.7%), the decrease blamed on the cost of pilot schemes with potential customers and investment in expanding the client implementation teams. In addition, exceptional remuneration costs totalling £343,000 were incurred.   

Not surprisingly, acting chairman and chief executive Elizabeth Gooch is choosing to focus on the year ahead.

“eg has completed a period of investment and emerged from the challenges and changes of last year a much stronger group,” she said.

“We are winning new customers from outside the financial services sector as well as targeting larger projects from global enterprises and increasing recurring revenues.”

She said the firm’s relationship with Aspect was developing well with a strong pipeline of new opportunities.  Part of this has seen the company win a new contract with a customer in the utilities sector.

There is also a focus on opportunities in new markets with pilot and full implementation projects under way in South Africa and Asia, as well as the UK – all using the integrated Aspect/eg solutions approach.

“New business opportunities being generated by both eg and Aspect demonstrate the continuing emergence of the back office optimisation market,” added Ms Gooch.

“With a large proportion of our expected revenues for the current financial year already under contract and a strong pipeline of further opportunities, we are confident of our prospects for the current year.”

On a personal level, the announcement of the appointment of new chairman Duncan McIntyre in succession to John O’Connell, who quit in December, will allow Ms Gooch to relinquish that role and focus on her duties as acting CEO.

McIntyre’s successful international business career includes 20 years as chairman, chief executive and investor with a number of quoted and private companies, mainly in the technology sector. Most notably, he acted as chief executive of Morse plc until 2007 and as chairman of Monitise plc until October 2013, which he helped build to a market capitalisation of approximately £1bn.

He said: “eg has a very strong position in the developing back office optimisation market.  We have the market leading product, a superb and loyal customer base and a committed team of people.  

“The business has significant potential but has yet to deliver on this opportunity.  The past year has been extremely disappointing and we will be working hard to establish an appropriate board structure, build a rounded management team and re-establish a culture of support and success.”

Ms Gooch added: “I am delighted that Duncan has agreed to become eg’s chairman.  His success in building international businesses is based on his deep understanding of modern technology markets, strong City reputation and real passion for developing effective management teams.  He will add real value to our business.”
 
The full year results show a decline in revenue to £4.46m (2012/13: £4.95m).  Software licences, maintenance and software services contributed 76% (2012/13: 69%) of total revenue, with the balance coming from implementation and training services.

The board has decided not to recommend a final dividend.