By Greg Bright
Warren Chant and Andrea West, founders of the Chant West research and ratings firm, have been appointed joint chief executives of Enzumo Ltd, the listed fintech company which acquired their business in late 2015.
In a letter to clients and others last Friday, Chant and West said that the arrangement would have no effect on the Chant West business and was prompted by further losses at the parent company following cost over-runs and delays in the development of its software program and a consequent shortfall in sales revenue.
Enzumo announced to the ASX on Friday that its chief executive, Andrew Rawlinson, had resigned as part of the management restructure. The half-yearly report also lodged Friday showed a loss of $2.02 million for the six months to December, compared with a loss of $1.5 million in the previous corresponding period.
Of the $3.6 million in revenue for the latest six months, Chant West contributed $2.57 million and the Enzumo business $1.04 million. Chant West, which is 20 years old this year, contributed an operating profit of $431, 537 – eaten up by the Enzumo losses.
Chant and West said in their letter: “The Board decided that Enzumo would benefit from a strategic review, cost restructure and change of leadership. They turned to us because we have run a successful and profitable business for the past 20 years and have a good understanding of the financial planning industry, especially at the institutional level, which is Enzumo’s target market.
“Enzumo has a well-established management and support team that will continue to deliver Xplan consulting and eLMS services to existing and new clients. Enzumo management will now report to Andrea, while Warren will continue to act as CFO, overseeing the financial management of the Group as he has done for the past year.”
They said it would be ‘business as usual’ as far as Chant West was concerned.
“We have a very strong and focused management team in place who will continue to put our clients’ needs first, as we always have done. Financially, while Enzumo is part of the same Group, our businesses operate independently and Chant West will continue developing our own products and services.
“Over time, as we get to understand the Enzumo operating business better, you can expect to see developments and enhancements in the services we provide to you. We will alert you to those at the appropriate time.”
The 2015 sale was a complicated one, which valued Chant West at $9.5 million but involved cash and shares and the retention of about $2 million in Chant West earnings by the acquirer. It was satisfied through a rights issue to existing shareholders.