The CEO of software solutions company Infomedia, Jens Monsees, has closed the door on tyre-kickers, pledging that this year will be focused on reshaping the business into a data-driven software company.
The company makes software solutions for automotive parts and service providers, including a parts selling platform, a car servicing selling platform that lets dealerships offer online appointment booking, repair quoting and vehicle inspections, and a data and insights platform that provides predictive marketing and dealer performance improvement programs.
It has amassed more than 250,000 users in 186 countries.
Last year, it was the subject of multiple non-binding takeover proposals from TA Associates and Viburnum Funds, as well as trade player Solera.
But after months of discussions, the company decided to draw a line in the sand. In October, the business announced that no binding proposals had been received from either party, and they requested that Solera and the TA consortium return or destroy all confidential documents.
Having taken on the top job in May last year, Mr Monsees was forced to navigate the takeover talks, while also kick-starting a transformation program within the business, which involved a restructure and some redundancies in November.
Speaking to The Australian Financial Review, he said interest in the company remained, but he planned to “protect the team from people who are just tyre kicking”.
“[Interested parties] need to be sure they can fund the deal, and they have to be willing to pay a certain price (and that’s not what the share price is reflecting). If there’s someone [who meets those criteria], we will engage,” he said.
“But my focus is totally on the business, moving into the product, data and connected car opportunity. What I’d like to do is focus on the business and clients, and not so much the ownership.”
Punished by investors
In the year to June 30, Infomedia increased revenue 23 per cent to $120.1 million, but net profit slipped 49 per cent to $8.2 million (largely thanks to a $14 million non-cash depreciation and amortisation of non-operating items).
Organic revenue growth excluding its SimplePart acquisition was up only 7.7 per cent on the previous year. Across the board, its results generally missed analyst consensus estimates
.Of its $120.1 million in revenue, $115.2 million (95 per cent) was recurring.
Unlike most listed tech companies with valuations below $1 billion, the business also pays dividends, and declared a 3¢ per share final dividend.
Despite being profitable and paying a dividend, the business was still punished by investors last year, with its shares down 23.5 per cent in the year. It suffered big share price falls when it became apparent no official bids were likely to be lobbed by its suitors in September and early October.
On Friday afternoon it was trading at $1.18, giving it a market capitalisation of $443 million.
Under former CEO Jonathan Rubinsztein, now the head of fellow ASX-listed stock Nuix, Infomedia took significant strides to become a software as a service (SaaS) platform company, but Mr Monsees said he had to “correct a few things from the old regime”.
“They weren’t automotive, they were consultants and ran the company as more like a consulting business, rather than a product business, which has much more upside,” he said.
“Customisation is an easy way to generate one-off revenue. But it’s not scalable, and it’s not the way to make a broader business ... we’re now more product-led, rather than project-led.
“We’re strengthening development teams and learning to say no to customisation projects that are one-off and don’t give us sustainable and recurring revenue.”
Mr Monsees was formerly CEO of the local subsidiary of UK-based conglomerate WPP and had previously been the chief digital officer of BMW.
The experience working in a digital role at a major automotive company made him want to take on the role at Infomedia.
“The mix of tech and automotive is fascinating. The most exciting thing for me is the data. In the past, our product suite was basically four silos ... but in those silos are chunky databases, and we were missing the data play,” Mr Monsees said.
The “clean up” from former management, he says, will be complete by the middle of this year, after which he is expecting faster, more profitable growth.
He also expects the business to benefit from the supply constraints affecting the new car market.
“Most people are focused on keeping their cars for longer, or refurbishing used cars to re-sell, and that’s core to our business.”
Yolanda Redrup is an award-winning senior journalist who writes on technology, healthcare and occasionally covers Street Talk from our Melbourne newsroom. Connect with Yolanda on Twitter. Email Yolanda at yolanda.redrup@copyright link
IFM Price at posting:
$1.20 Sentiment: None Disclosure: Held
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