Redundancies as GrowthOps announces restructure to enter ‘next stage’
Trimantium GrowthOps, or TGO, has announced a round of redundancies as it restructures its business in a ‘natural evolution’.
The number of redundancies hasn’t been confirmed, but Mumbrella understands more than 30 jobs have been cut.
GrowthOps has gone through multiple changes in 2019
Stated Purpose:
to reinvent how organizations grow.
How:
retrench people and have your share price go from $1:30 to 14c.
Sad situation and I feel for all impacted staff. As a small consolation, at least they will be paid their employee entitlements, while the staff remaining (including those doing the firing) will likely lose theirs on liquidation.
Exactly my thought.. Hope I get lucky and be made redundant next
might want to look for a new role asap!
😉
If GrowthOps was a chocolate bar it’ll be flake…all crumbling
Or a Violent Crumble?
Or a twirl!
We experts in growing businesses…except our own which is in terminal decline.
?
What a bunch of clowns. So many talented people caught up in the maelstrom of BS. Keeping rich people rich. Ha! Your day will come [edited under Mumbrella’s comment policy]
Fingers crossed the restructure will turn the ship around. It’s not the first company to face difficult challenges.
Surely the new board and management would see the dire state of the books…these redundancies can’t hide this fact anytime longer!
It is interesting how this cost cutting measure have all played out in an already top heavy company that now has three CEOS that’s logical.
The employees enjoying the fruits of rich man’s labour.
What a clusterfuck. Sad to see a great agency like AJF go down in this sinking ship.
Hi Hannah, can you please clarify whether Jason Polson or Clint Cooper is the CEO replacing Paul Mansfield? According to ASX filings, it’s Cooper. Without mention of this, it could be misconstrued there is no longer one CEO for the Group but two, for two regions. Thank you.
Hi there,
Thank you for drawing this to my attention. I’ve just confirmed with TGO and both Jason and Chee Hung will report in to Clint, who remains in the role as MD and CEO. I will update the story to make this fact clear.
Hannah – Mumbrella
This is tragic – AJF have always been a class act. How did they get talked into bed with these monkeys?
The real issue here is that Trimantium never defined who they were or what they did. So to the industry, they looked like another Photon (not a good look), and to the market they just looked like a roll up – the market HATES a roll up.
What’s very clear is that someone didn’t do their homework. Why would you float a business before defining what you offer? Around 5 minutes of research would show you how the market treats a roll up. Amateur and, some would say, negligent. Coms businesses have a sketchy record on the market at the best of times, and they went in with both hands tied behind their backs.
The once proud AJF now has a market cap of under $20m. That’s the bargain of the century. I’d be buying, if I only knew that the rest of the business wasn’t going to destroy them.
It’s pretty damn clear what this company offers. They offer Agency and IT support for companies in Australia that are facing challenges from global markets, from companies like Amazon, Google etc…
Its a broad spectrum digital agency focused more on IT than Creative. I don’t know how you can miss that concept.
Are you kidding me?
I used to work there and I didn’t know we offered IT support.
Thought they were a digital / social / atl agency that offered value-add services like app and website development, executive training and financial auditing? Certainly not an IT company.
$2m cash burn last quarter, with now only $5.7m left in the bank. Surely won’t live to see April, but maybe shut by Christmas?
Must be a few very nervous clients out there.
The proposition was never actually defined prior to sale, and once all the companies were jammed together no real work was ever done to work out what the proposition was. But at the same a new sales structure was implemented that killed any existing business activity for the old company units. By the time TGO realised the mistake it was too late. Buying APD burned up any runway TGO had to get its act together.
TGO already had their ‘act together’.
Problem was, it was a crap act destined to fail.
I doubt we’ve heard the last of this.
I think if you were the person putting together this roll-up in the first place and you had a number of company interests to roll into it yourself, this listing made a lot of sense.
Easy way to get a sizeable amount of cash for an unrelated group of businesses that otherwise weren’t worth a fraction of the listing price.
Unfortunately it didn’t make any sense for the investors somehow convinced to part with their hard-earned for these over-inflated ‘assets’. Or the one business that was worth the money – AJF – which is now being dragged down with the sinking ship.
Unless you sell your shares, you don’t make money in a float. The stock market is not a zero-sum game. Money doesn’t all go somewhere. Money lost is money lost to everyone.
As far as I can tell, no one sold big, and one moron even bought 17 million shares at double the market price.
So, no. It didn’t make any sense. And no one got ‘a sizeable amount of cash’ out of this absolute abortion of an IPO.
Current TGO employee here from the creative space only, with no concrete experience in business management.
Obviously concerned about the current circumstances, but from a purely personal perspective as I don’t have the financial background to understand the implications.
Can someone explain to me simply why the IPO is such a disaster and what our future probably looks like?
Word from Clint and the new board is frustratingly ambiguous.
Sacking of [edited under Mumbrella’s comment policy] is massive and seems like a really counterintuitive move for the direction the new board seems to be pushing for.
I guess my small bouts of optimism come from the amazing and accomplished individuals we still have and the fact that at a practice level at least: we are hitting targets, winning big accounts and are profitable. Is all this work for nothing?
I really believed in everything we were sold and would love to understand the true depths of my naivety, as well as that of people who do understand the market that have taken the leap of faith.
Firstly, the IPO: the business never defined its reason for being or its positioning or its big idea, so to this day it’s a tough stock to trade because no one really knows what they’re buying. Is it an ad agency? A digital agency? A consultancy? All or none of the above? So all the market has to go on is cashflow, which, due to that terrible APD acquisition, was dire in the last annual report. Hence, shitty stock price lagging the actual value of the business by miles. This can be fixed but it will take time. Sentiment needs to turn. In short, it listed prematurely or should never have listed at all.
Secondly, the future. No one knows the future. But the central, successful businesses are still intact and still good companies. So if they can keep the lights on long enough to define who they are, what they do and what their plans are for the future, there’s no reason to worry too much. Things will improve. And one big account win can turn the whole ship around overnight. (Inversely, one big account loss…)
But they’re low on cash and they’re currently running at a loss. If nothing changes, there’s only enough in the bank for another 6 months. Then, cactus.
So there you have it.
Thank you, that has made a lot of things clear. Hopefully the circumstances of yesterday, which were heartbreaking and ugly for the people involved, weren’t for nothing.
Lots of “ifs” and “coulds” and “mights” in that strategy.
There are some very strong people in this business. All of the original AJF partners, for one thing. And many new businesses have a rocky start before going on to greater things.
Mistakes have been made, action has been taken, and the future looks somewhat brighter.
You can bash them while they’re down. It’s the Australian way after all. But don’t write them off just yet.
Too little too late
Good luck with that.
Any strong people left would be well advised to shell out the $2k it costs to start their own agency and hang up a shingle – or get a job elsewhere. Only duds will remain.
There have only been duds left at the APD arm since it was acquired. That business was already going downhill at a rate of knots before TGO came along.
The cuts have affected AJF as well.
can’t for the Holiday edition of the AFR…….
Where the annual Muppet awards are handed out…..
I asked myself the question why do it? Why Buyback shares when they did at between the 40-60 cent range….
Now with effectively $5.7 mill in the bank…. it’s actually closer to $5 mill …. 36 redundancies and I am hearing they won’t have enough to pay out end of termination payments….
Couple that with the inevitable capital raise from the markets which will be priced probably in the single digits ……..$1.30 down to minus $0.09 cents for sure for the cap raise easily……having to cap raise at this ridiculous price and introduce a new substantial shareholder…for pennies in the dollar……….
…these poor remaining employees are going home to their Christmas family gatherings having no certainty of their jobs ……….
This is the perfect example of how to destroy GREAT SMALL BUSINESSES whilst individually they each preform gallantly………….
But this criticism is not actually reserved just for the muppets running this business but for the MGT of the individual companies that sold……So many intelligent people fooled by the smoke n mirrors, fooled by greed and not held back by a sense of morality to the people they have employed for years n years…….Just pure greed by the selling managers……..
This will be a test case for university students for years to come………..
I honestly can not believe that this case of murdering companies is not a white collar crime…peoples livelihoods, people’s sense of dignity, turning up for work 20 years plus……..all gets literally murdered ….in pretty much 18 months…..how is not taking away some one’s livelihood by gross negligence not a crime,,,,,,,,,,,
we just put it down to “The Market”………….Give me a break………….
These morons heading this box I truly believe had no intention to destroy this many businesses in the year but ignorance of the law is no defense in a murder trial but in the world of finance ………the directors with their ignorance and arrogance will walk free………..albeit with a little bit of shame before they go phoenix themselves into another cash box stuff up the lives of more families…..
Honestly I just don’t understand how karma does not get these folk……and I don’t understand how gross incompetence is not punished…….Doctors are punished, financial planners are punished, transport companies are punished for negligence…………why can’t these people be punished
WPP have been the masters of agency value destruction in this country, well before TGO appeared on the scene.
Another listed entity. But at least they paid top dollar for the companies they destroyed.
When will founders learn that when you sell to a listed company, you are selling your ass to the devil?
Do you have any idea what the devil does to asses?
… and this is a great reason for clients to work with independent, locally-owned agencies, where the owners have skin in the game with their clients.
GrowthOps if it survives will look very different
It needs to strip everything back to AJF and some complimentary media buying skills.
IECL is a great business but has no connection to creative and media.
I imagine it can be sold for a profit.
The other business will fall to the way side
Their inability to cross sell services across the group made the merger pointless.
Most damning is the state of their marketing.
Kill valuable and profitable original brands. Lose all inbound leads.
A marketing team having to rebuild the website from scratch every 3 months.
No positioning and brand building
No lead gen
No sales team
It’s a massive shame for many staff who’s equity as part of the mergers is now almost worthless.
At the coal face lovely people. Smart people. People who tried hard to build somewhere great to work.
At the top. A lack of critical decisions about what they wanted to be and how to make it happen.
You’re either a Chicken or a Duck
You can’t be a chickaduck
There’s some people who really have been shown to not know what they were doing.
Hope too many more people aren’t left stranded.
Could be an amazing riches to rags to riches story.
Could be a cautionary tale.
Feel for the people working there, why would anyone stay there or start a new job there? Just get out and remove any mention from your LinkedIn.
Seems the new management have no clue either. What does cyber security have to do with creative? NOTHING!! Keen to know how often the AJF guys get asked for their expertise to stop a DOS attack?? :O
The whole thing seems super dodge from the get go. The reports of loaning of money to Sargon when the company clearly losing buckets of money is appalling. Surely this should be investigated by ATO and ASX?? It’s definitely not ethical that’s for sure.
Just put a bikini model on the board. That’ll fix it.
“The new GrowthOps board and CEO have recently undertaken a review of the business and agreed the next stage of the company’s strategy,” said the spokesperson.
umm… it probably starts with coming up with one first.
i wonder how mr Kingston is feeling?
This caught my eye…
“Kingston said many current systems are nothing more than a facade – outdated systems patched over with the appearance of modernity.”
https://www.financialstandard.com.au/news/trustee-firm-expands-into-fund-administration-149019536
From the AFR commentary Sargon is having trouble raising money
https://www.afr.com/street-talk/money-hungry-sargon-doubles-coupon-for-pre-ipo-raising-20191110-p5395v
Also ASIC is taking action against one of their subsidiaries
https://asic.gov.au/about-asic/news-centre/find-a-media-release/2019-releases/19-301mr-asic-takes-court-action-against-super-trustee-promoter-and-others/
Thanks Henry,
Quote from one of the links:
‘The new terms show just how keen Sargon is to get its hands on the fresh funds.
Sargon needs $31 million to complete the purchase of OneVue Holdings’ trustee services business, Diversa, by the end of the month. The deal, signed in June, saw Sargon agree to pay $12 million up front and another $31 million by November 30′.
Wonder if the TGO loan to Sargon relates to this?
Hmmm, looks like bad credit, last media seller to tighten payment terms will be the bunny.
Clients should feel incredibly shaky after hearing/seeing the happenings that is GrowthOps.
Won’t be surprised if some tenders are in the open market and work is shifted across…
Nero recreated
How will they EVER attract decent talent to this now dying brand? The culture must be dire.
Can confirm…abysmal culture in the office. There’s so much that you can do to [edited under Mumbrella’s comment policy] …it’ll still be that!
This whole business was a farce from the start, someone who thought they were smart selling air to unfortunate investors. Nothing more than smoke and mirrors and as the above shows, Sargon in a similar position. Sad that this can still happen, but hyped mediocrity is rife.
So the former Victorian Minister for Innovation & Digital Economy is now making decisions to retrench staff building businesses.
…..and don’t forget former TGO chair Dominique Fisher was on some state govt board to promote Vic technology and innovation or whatever.Thankfully for Australia Post and Paddl [that’s a great story in itself] Ms.Fisher will be able to devote all her time to advising them on how to grow and innovate.
Ah yeah Paddl – and for “some reason” TGO flew a bunch of staff down to Melbourne for the “Paddl Games” (Cite: https://blog.paddljobs.com/blog/high-impact-innovation-growthops-sponsors-day-4-of-the-cosboa-innovation-games-201819 ) where they advised competitors on their entries and offered mentoring etc. At a time when there was no money for TGO staff working on projects to actually go and meet their clients it was fine to burn cash to prop up Paddl.
Wow! But,not surprising.
Maybe mumbrella could do an interview with Dominique Fisher where she can tell us all about Paddl.
For instance, what it actually does, is it profitable, who are their paying client and so on.
Maybe Ms.Fisher can provide mumbrella some names of Paddl investors so they can tell their Paddl stories.
Current employee…so there’s been a redundancy almost every day this week…Wonder if there will be one today or tomorrow to finish it off!
Growth-oops
Growth Flops!
Shrink-ops
I worked at APD and had the wonderful experience of experiencing the well thought out and executed merger of dgm, Next and Jericho. Joking, it was a disaster and a great lesson in how not to do something! The board at that time did an awful job of merging these companies and within 12/18 months of those businesses being merged the “accountants” came in under the guide of leadership as the C level in Australia were an absolute disaster (this is an entire saga in itself). A combination of C level who literally had no place whatsoever in being in those positions (must stress in AU, in the wider region, there was solid leadership and growth) was the beginning of the end of APD and the purchase was frankly a miracle for them as they had been trying to sell for a few years and barely afloat. Seeing this play out is not surprising for those who were involved from APD. ln the main, thankfully most of the team have moved on to better things and hopeful the people most recently impacted will find their way from here.
This 100%! As an ex-APD employee as well I agree completely. The C level in Australia through the period you describe and up until the TGO take over couldn’t run a chook raffle.
yes! they had an offering called Digital transformation which they could NEVER get off the ground…then it moved to a “growth” mindset. When will these agencies listen and start focussing on their core offerings?
Scott Tanner should stay well clear of this mess.
He’s in danger of becoming the public face for the mess [Edited under Mumbrella’s comment moderation policy]
So the new structure is 2 divisions and 3 CEOs?
Thats a lot of CEOs. Sounds expensive. Also sounds like musical chairs on the deck of the titanic.
Share price dropped to 12 cents!
How low can we go??!
10 cents now!
Solid, sound businesses going for a fraction of market value – PE of less than 1 once the loss is cleared. The only question a smart investor would currently be asking themselves then is, do you believe the board can turn it around before they run out of cash? Because if you do, then this is a screaming, hooting, clanging buy with a flashing light on top. 5 bagger within a month of going cashflow positive. You see many of those floating around the ASX?
So a 5 bagger would get it up to 50 cents. No doubt the new board and senior management will be rewarded substantially if this happens (look at all those potion grants….).
Wonder how the poor IPO investors who paid $1 would feel about such a “success story”.
I think with the amount of money they have in the bank it’s impossible to turn this ship around
A totally valid opinion, but I guess that’s where your bets and my bets differ. I’ve worked with a number of these people in the past and they’re not clowns, no matter what the brains trust in this comments section will have you believe. It is in so many very smart people’s best interests to save this company that I’m betting on a turnaround – and I’m betting with my wallet.
Of course, as always with small caps, I could be wrong. I have been in the past. Here’s hoping I’m not.
You can have some confidence in the “P” but the “E” is the TGO accounting departments best creative work. Glitter rolling fairies have been very hard at it!
even if it is a 5 bagger then the shares go up to 50 cents. Wonder how the investors who bought at IPO for $1 will feel.
Looking at the numbers in their annual report is a big worry for current staff…the way they’re burning through cash is a massive issue
Unless they secure more cash, do a sale or miraculously land some whales of clients…they’re going to have to pull up stumps (pun intended to one of the new board members)
We will know more when the next Qtr & Half Yearly results come out ~Jan. If they have stopped the sale slide, reduced expenses and at least break even on the cash flow they maybe able to start turning the business around.
Revenue
They need to be growing REVENUE. If clients are leaving that is defiantly not good. But be careful analysing just the top line revenue number…. watch out for the pass through media sales which blur the value of the business.
Debt Time Bomb.
$12.7m of the $14m facility has been drawn and the agreement was only a 2 year Nov18>Nov20 deal. You would assume negotiations will start taking place ~March for refinancing.
I bet the banks are closely watching the situation and are preparing administrations to come in at any point and take control. It will be hard to refinance this senior debt at the current share price & cash in bank.
They “could” put one or multiple subsidiaries into administration and play hard ball with creditors but everyone can see through that strategy.
Share Price
The business has a market cap of circa ~ $15m at 10c
I can’t see how they will be able to any sort of capital raise of 2m+ The average price + discount could be in the 9c-15c range and any new investors would want to know that new capital is not to be used to prop up Director & Management fees or pay for related party transactions!
H.
Solid underlying businesses, smart employees who know their stuff and do a good job in their respective areas. Undervalued. Australia’s tall poppy syndrome and several consecutive weird decisions by the old guard excessively punished the share price. Most of those bad decisions are not material but looked dodgy damaging sentiment. The new board and CEO(s) seem to be finally taking the strong leadership action for a turnaround. I do believe this will be their finest hour.
There, fixed it for you.
You should buy up then Quietly confident.
I think it is far from “Solid underlying businesses”. There’s a handful of people from AJF (a Melbourne only based creative agency) and that is about it. The rest of the other businesses have been gutted. That hardly makes for a company on the ASX turning large revenue or profit.
But hey I could be wrong so you should buy up! It’s only 10cents and looks like it will hit below 10c shortly.
Their finest hour? Bullish optimism can be a powerful force in a market, but delusion has proven less successful. Their finest hour. Eyes fixed on the horizon as the bridge slowly sinks into the ocean.
Solid underlying business? Do you mean the business that’s carrying a $12.5m loan debt whilst returning -$2.0m quarterly? Are we talking about the same business?
The board just voted themselves a payrise!! Cite: https://www.asx.com.au/asxpdf/20191127/pdf/44c073yplwtp31.pdf
Share price still dropping and the market cap about to fall below $10m.
It’s like watching a slow motion train wreck…
After listening to the podcast, Kingston doesn’t care about the share price!
Surely no more redundancies before Xmas
Philip Kingston doesn’t [Edited under Mumbrella’s comment moderation policy] . Feel sorry for all the employees still in there. Especially the senior management of AJF – saps till the end
Another senior member resigned!
It almost feels like musical chairs with senior members…surely another redundancy payout will result in more red
IECL had such a great Legacy sad to see it spiralling down