Investor fund ups stake in Enero as CEO Melhuish approaches end of current contract

enero and naos asset managementA boutique investment fund has quietly built up its stake in marketing agency holding group Enero to just under 15 per cent, as shares in the company continue to slide.

NAOS Asset Management has upped its stake in the group, formerly known as Photon, from 9.2 per cent last December to 14.81 per cent of the company, making it the second largest shareholder.

CEO Matthew Melhuish’s current three year contract expires on June 30. The increased stake gives NAOS the ability to have a major influence over votes on matters like remuneration and board appointments at the Enero annual general meeting in August.

Enero agencies include BMF, Naked Communications, Frank PR, The Leading Edge and Jigsaw.



When Melhuish took the reigns as CEO in January 2012 the share price was $1.08, slipping as low as 32c in June 2013 as the group struggled to turn a profit with its two biggest agencies, BMF and Naked, failing to fire.

However the last 12-months have seen an uplift in its share price and market capitalisation following more positive financial results for the last financial year, having restructured and slimmed down the company under Melhuish’s leadership, with shares getting as high as $1.26 last August.

Results for the last financial year showed that while the group’s overall earnings had dropped from $127.3m to $119.5m its EBITDA – earnings before interest, depreciation, taxation and amortisation – rose 159 per cent from $3.5m to $9m due to a large drop in staff and admin costs. That report also showed Melhuish’s remuneration package had risen to just over $1m.

However, the half-yearly financials released in February showed the group’s net revenues dropped nine per cent to $56.2m and a profit of $974,000. Since then the share price has gradually declined, dropping to 67c in mid-April.

The Enero share price Jan 2012 - Apr 2015. Source: Google Finance (click to enlarge)

The Enero share price Jan 2012 – Apr 2015. Source: Google Finance (click to enlarge)

Today Naked Communications also revealed a new Australian leadership team following the departure of Carl Ratcliff as CEO. The head of the agency’s New York office Troy Kelley also departed in March, leaving its North American and European operations under the purview of Christian Gladwell.

As Mumbrella charted recently all but one of the Australian agencies in the Australian portfolio of Enero have been through at least one leadership change since Melhuish took over as CEO of Enero in January 2012.

The biggest single shareholder in the group remains a group called RG Capital and Multimedia, which owns around 25 per cent of the stock and is headed up by Susan McIntosh, the former chief financial officer of production company Grundy Worldwide.

McIntosh has been a non-executive director on the board since 2000 and sits in the remuneration and appointment committees.

The four other board members include Melhuish, former CEO of Austar Communications John Porter as chairman, Roger Amos who is also a director of REA Group and Max Johnston a former CEO of Johnson & Johnson Pacific.

NAOS did not reply to requests for comment on its intentions for Enero.

enero board

Enero board members (l-r): John Porter, Matthew Melhuish, Susan McIntosh, Roger Amos, Max Johnston


Alex Hayes


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