New chief executive officer (CEO) Steve Vaughan hopes to turn around the fortunes of troubled IT services supplier Phoenix IT (PNX) in the next three years. Appointed 12 March, Vaughan has wasted no time in assessing the business and issued an operational fix-it check list and three-point plan to rescue the business.
This involves establishing a trio of distinct divisions: Business Continuity, Managed Services and Partner, aimed at improving both external traction and internal coherence, and addressing cloud services demand effectively, an area where it has failed in the past.
Year one will have management concentrating on operational efficiency and quality, without sacrificing stability. Year two’s focus will be on improving account management and standardising services, while integrating all of these moving parts into an effective and integrated business is the year-three challenge.
Vaughan was behind the recovery at then struggling IT business Synstar, eventually selling that to Hewlett Packard (HPQ:NYSE) for £163 million in 2004. Analysts believe his three-point rescue mission is not only sensible, but doable.
‘We think that the new strategy, and the details underneath, sound both appropriate and deliverable,’ says Numis number cruncher Will Wallis. ‘This turnaround strategy should set a platform for longer-term sustainable returns,’ Investec confidently predicts, albeit down the line. This year, February 2015, investors can expect earnings to crumble further from last year's 12.1p per share, with 7.2p or 7.4p the expected range. But longer-term, Panmure's George O'Connor sees a trade sale of the business, at a substantially higher price that the stock's current 92.3p.
