Troubled Photon company Future House axes jobs
Photon company Future House – which was created from the remains of the company’s disastrous Geekdom venture – has made a series of redundancies and may have closed altogether, Mumbrella understands.
The move comes while Photon Group remains in a trading halt as the company seeks to recapitalise and restructure under its newly arrived CEO Jeremy Philips.
Photon owns a string of Australian agencies including BWM, BMF, Naked, Mark Communications, AdPartners, Be Interactive, Bellamy Hayden and C4.
Photon was founded ten years ago and listed on the ASX in 2004. It now employs more than 5000 staff across 49 companies.
CEO Matt Bailey resigned at the start of the year, with the company claiming that Bailey’s home in Melbourne was too far for him to travel from. He was replaced by Philips, who started on June 1.
Future House’s switchboard rang unanswered when Mumbrella tried to call it earlier today. Sources have claimed that it has been closed, with about 20 jobs immediately lost. The company web site describes Future House as:
“A place where talented brains are nurtured and allowed to develop. We’re making online a better place for everyone to enjoy.”
There are unconfirmed rumours of significant cuts in other Photon companies too.
Since Photon was placed in a trading halt, there has been speculation that it would make major write downs and restructure – partly because it is burdened by the payments due to founders of some of the agencies it purchased during its acquisition spree.
Recent months saw its PR agencies Kinetics and Hotwire merge; a legal action from a former owner of Photon company iMega; the messy break-up of Geekdom and sale of its get-rich-quick-on-the-internet college Geekversity leading to a $5.5m loss; a 45% drop in profits; and the closure of its social media agency The Population.
Because Photon is in a trading halt, nobody was available for comment.
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
Linkedin
Partying since 1999. I agree. They had a $1m chrissy party last year but they only made $10m so go figure! they obviously don’t understand the “figures”. most of those execs only care about the major shareholders which is them, but when it comes to the minority person who wants to pop in a few bob because they “respect their people” and then they sack those same shareholders, then you do your job and your dough as well. They can talk the talk…..
User ID not verified.
“A place where talented brains are nurtured and allowed to develop. We’re making online a better place for everyone to enjoy.”
In reality not so much.
It’s a merry-go-round at the door of (edited by Mumbrella for legal reasons) with clients and staff ditching them every week. Not a good place to work especially as their attitude to business is ‘we will take whatever we can get’. Where’s the specialism? There’s no management and morale is at an all time low. For every new client win they lose another with (edited by Mumbrella for legal reasons) and other major brands dropping the agency like a hot stone. I hear rumours their biggest account – (edited by Mumbrella for legal reasons) – is poking around looking into alternatives
User ID not verified.
Partying since 1999, maybe. A case of indigestion, definitely. A $1M Christmas party? Well it was a great party but it wasn’t $2,000 per head. And being a shareholder doesn’t entitle you to work for the company, unless you can afford to buy enough shares that you don’t have to work anyway.
It is unfortunate when ambitious people get caught in the cross-fire. At least these cast-offs will receive their pay, leave and superannuation entitlements, unlike the dispossessed employees of basket-case companies left to run into the ground until there is nothing left but stationery and dust.
User ID not verified.
All of these communication networks have major structural problems. They load up the Debt, claim high EBIT and then have a low Net profit to show for large market caps. When you read balance sheets, like Photon, STW and others, you can’t really get any clear idea what the future liabilities are ‘pay outs’ for acquisitions, most of there cap its based on massive ‘Intangible assets’…
Blue Freeway, Comquest, now Photon, who’s next?
User ID not verified.
Tiffany,
Not sure who you are or what your gripe is with our agency, but for the record I would like to respond to your post and set a few things straight.
Many of the clients you mention in your rant, including Nestle and Bega, remain clients of ours to this day. They have always been clients on a project basis and we are currently working on campaigns for both of them. We have worked with Jenny Craig for almost three years now and have celebrated a record publicity year with our Magda Szubanski campaign. JC is staying put.
Other clients you mention are those that we have stopped working with over the last 18 months – and as a percentage of our 30-some stable of clients, I would beg to say that is not so unusual. It is a known fact within PR agencies that things change and I would challenge you to find an agency without staff and business fluctuation.
We are happy to report recent wins including the CSIRO, CHOICE and Nintendo.
Try and have a happy day.
User ID not verified.
Thanks for that comment, Mark… however, it does somewhat undermine my having removed reference to the agency for legal reasons at the request of one of your colleagues. Have a happy day yourself.
Cheers,
Tim – Mumbrella
Sorry Tim, didn’t realise this was in the works. Thanks for stepping in so swiftly.
M
User ID not verified.
There seems to be a lot of “Photon beating” at the moment, and although some of the shareholders/board members might not be the brightest sparks there is still a lot of telent in some of the Photon companies that don’t deserve the bad press they are getting by virtue of being in the group – and no i don’t work for one of them
User ID not verified.
yes, agree, there is a lot of photon bashing for the wrong reason, but my gripe is that I bought shares at one amount and they are now worth another, so at the end of the day, while I accept responsibility for a bad investment, the directors of the company have to accept responsibility for the the bad share price, the bad profit performance, the over borrowing of debt and giving themselves payrises. When you read last year’s and the year before reports, you are seeing directors getting huge payrises, bonuses on divisional performance, share options and the like while the company reports a fall in net profit after tax of 39% and sacking a lot of people. Then you read that they spent $1m on a lavish christmas party with the most expensive DJ in australia and another well known (and probably expensive) band and then find out this party alone wiped out 10% of their 1st half earnings. I understand people work hard and play hard, but my problem with Photon is not the people working there, it’s the way it has been run, so so poorly. I think that the new CEO hit the nail on the head. The accounting and corporate governance and communication practices have been diabolical and they can’t even get forecasts right.
I have never worked there but I put in $20k that’s now worth $3k and no end in sight of how I can recover anything at all, so surely someone has to feel the heat so while I can’t believe everything I read, the press hasn’t been too kind either.
What also astounds me is that Photon appears to own public relations firms, yet none of them seem to be out there pro bono helping their parent company actually put some positive press out there and talk the company UP at all, they continue to allow themselves to get beat up. Oh well, it’s always the plumber with the leaky tap.
I should have bought fairfax
User ID not verified.
Any agency that sold to Photon deserves all the bad press they get (even if it might be a bit harsh on their staff). It was never a sustainable model as no thought has ever been given to succession planning, vendors have no incentive to invest in the long term future of their businesses (beyond earn out) & they bought & borrowed recklessly without proper due diligence. Their current predicament really shouldn’t be a surprise to anyone!
User ID not verified.
As a shareholder of Photon I am bitterly disappointed by the performance of the company, but more importantly the management team. Disclosure of performance has been disgraceful IMO. Last years Cap raising, followed by a profit downgrade is the perfect example. I can’t see how management didn’t know of the downgrade/performance issues before the raising, yet things seemed rosy when asking for more shareholder’s capital.
We wait an eternity to hear hopefully positive results and yet again we hear bad news of poor performance and more capital raisings.
I’m still trying to decide our next move, do we trust our new CEO?…at least reading the above we know cost cutting is underway (sorry to those affected).
These things can be expected from cyclical companies…but an upfront management team goes a long way to earning respect from investors and the public.
User ID not verified.
Agree with David. Honestly they stick their hand out for more dosh knowing that the numbers were getting worse. Glad I didn’t tip in any more cash. The old CEO leaves and dumps a heap of shares after he left. Tells me that he didn’t think much of it either. Oh well, as long as he drives a fash flashy car then that’s all that matters, get a payrise, a flashy car and more options, ask other people to put their hands in their pockets and then do a runner.
User ID not verified.
Put all shareholders out of their misery and take the company private – if there is anyone willing to fund it that is………… and those wonderful EARN OUTS that are still to come ! Hooray !
User ID not verified.
photon’s not doing as well as people thought they were. whats happening with imega group? its another photon’s company that slashed all the employees and focused on geekdom/sitely. imega is merging with another company?
User ID not verified.