There is a view that the MD may be better as an internally focused COO rather than as a CEO of a publicly listed company. While I would agree with the latter part of that sentiment (evidence is the share price, and the inexplicable absence of a narrative to accompany key decisions that affect shareholder sentiment) - I don't think there is compelling evidence to support the first part of the view.
In the announcement today:
Combined, DWX and Cloudten at acquisition generated pro-forma revenues of ~$7.1m. In FY20, Vortiv generated $11.5m revenue, an increase of ~62% on pro-forma acquired revenue over 2-3 years.
However, if I recall correctly, at acquisition, DWX had revenues of $3.0 - $3.5m consistently over the 3 preceding years and C10 had $3.8m in revenues that had consistently increased 100% year on year in the preceding 3 years. Simple math would suggest that the pre-acquisition growth rate has not been maintained. Not even close. If those rates had been maintained, annual revenue would be at $15-15.5m per year. Anything oever would be to JL's credit. Anything under raises the question in my mind as to what value added is he bringing, and how should that value be reflected?
Historical revisionism, may argue that the two companies would not have maintained their trajectories without the VOR/JL difference, but I do not recall their trajectories being challenged at the time of acquisition. Indeed, they were a point of justification for the value multiples being paid, IIRC.
Happy the acquisitions were made as we were going nowhere fast. Unhappy that the SP does not reflect our potential. Very unhappy at the obvious inactions that have led to this. Keen to see change.
All IMO and DYOR.
