By Nigel Somerville, The Deputy Sheriff of AIM | Saturday 23 May 2015
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
On Tuesday Tern plc (TERN) announced the appointment of Mr Darron Antill as CEO of Cryptosoft. I am sure Mr Antill is a fine chap, but the RNS made no mention whatsoever of the fate of the founder and CEO (until now) Mr Jon Penney. Why? And then there is a very impressive looking CV of the new man. Is that all it seems?
Normally when a CEO steps down even in the most dubious of circumstances some kind of mention is made of the fact that he/she is going, and thanking them for their sterling efforts. But Mr Penney was not worthy of even the most cursory of comments. Has he left the company, one wonders, in some kind of disgrace? Was there a boardroom bust-up?
A small spot of digging later and we may have an answer, but not without throwing up another question. The RNS quotes Mr Antill frothing about what an exciting opportunity it is to get to build a global software company and how he can’t wait to get started. Yup, Cryptosoft – which had just £28k of capitalised software on its balance sheet when £3.8 million market cap Tern originally bought a 75% beneficial interest in it last year is now going to be a global player. No over-egging there, then.
We are treated to a quote from Cryptosoft Chairman (and Tern board member) Mr Al Sisto, who – in an RNS signed off by Nomad WH Ireland - apparently states:
Darron's industry experience and expertise will be invaluable in helping us scale, grow and expand our presence in domestic and international markets. Darron's channel and eco-system partner knowledge will particularly help us as we evolve our go to market strategy
Meanwhile on the Cryptosoft website is a link to a press release which announces the appointment of Mr Antill. You can see it HERE. In the press release, we are told that:
Cryptosoft Founder and CTO, Jon Penney said: “Darron’s industry experience and expertise will be invaluable in helping us scale, grow and expand our presence in domestic & new markets internationally. Darron’s channel and eco-system partner knowledge will particularly help us as we evolve our go to market strategy.”
Er…so is that quote Mr Penney or Mr Sisto? Or was it just made up by the PR bods? Or perhaps Mr Sisto and Mr Penney are just so at one that they are actually saying the same things as each other. Perhaps they even finish off each other’s sentences! But if that is the case, why has Mr Penney been demoted from CEO to CTO? Has he been removed from the board of Cryptosoft too?
And so to Mr Antill’s CV. We are told that during his time as CEO of Appsense he grew revenues from $25 million to over $100 million globally. The company accounts for the year to June 2013 (about six weeks after he stepped down) showed turnover of £62.2 million, about $96 million, so not far off the claimed $100 million. But he was appointed in Oct 2010 (first as COO, then CEO during 2011) and the accounts to 1 July 2010 show turnover of £28.9 million – around $45 million – rather more than the claimed $25 million. Doubling turnover is impressive, but it is not a fourfold increase, is it? Looking at the group p&l on the balance sheet I note that it went from £4.4 million at July 2010 to minus £1.5 million at the end of June 2013. Not quite so impressive. Sales are vanity, cash is realirty.
Turning now to Mr Antill’s work at Vistorm, we are told that over a seven year stint he guided it [the company] through its acquisition by EDS and then to HP. Leaving aside HP’s patchy track record in the M&A department (need we mention Autonomy?) that looks a tad disingenuous.
Vistorm’s acquisition by EDS completed on 2 April 2008, the same day that Mr Antill stepped down. HP subsequently completed its acquisition of EDS the following August., five months after Mr Antill had left. I have found reports that Mr Antill may have continued to work in some connection for HP at HP Information Security UK Limited (see HERE). There is a company with that name on the Companies House website, but I’ve not found any reference to Mr Antill.
As for Mr Antill’s time with Ultima Business Solutions Limited, he was appointed in Sept 1998 as Sales and Marketing Director before becoming MD. FY results to Dec 98 show turnover of £28 million. By the time he had left (at the end of Sept 2003, according to a Companies House filing although the FY Mar04 report states it was at the end of June) the company reported turnover over 15 months to the end of the following Mar (2004) of £58 million – pro-rated to a 12 month figure of £46 million in the accounts, having clocked up £43 million in the previous 12 month period. So whilst Tern told us that Mr Antill grew the company from £17 million revenues to £50 milion it appears from FY Accounts filed at Companies House that the actual figures are more like growth in turnover from £28 million to £46 million – and some of that period was when Mr Antill was not actually leading the company.
Clearly there has been some major change going on at Cryptosoft, and it does look as though new CEO Mr Antill is a very much bigger fish to be leading the company. I have absolutely no idea why it appears that Tern is overstating his record of achievement: surely what I have dug up looks impressive enough, so why make it out to be more than it is?
As ever, when it comes to RNS announcements from Tern the reality does not always seem to match what is being stated. The shares have firmed up as news of Mr Antill’s recruitment has emerged but I note this morning’s RNS that one major shareholder has been offloading into the rise. I await with interest to see whether there will be yet further sales of Tern’s stock by Hargreave Hale to report in due course.
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