ITWeb: Why did Cowles leave?
Joubert: The company needs a different focus - not to continue to grow or make any more acquisitions and expansions, but to start consolidating the current businesses that we have.
Our revenue grew from R188 million in the previous financial year to over R1 billion in the current year - we have grown more than five times in a single year. Such fast growth was naturally accompanied by certain operational problems and we now need to increase efficiency and profitability.
Cowles` strength is in creating and growing businesses; my strength is in consolidating businesses.
ITWeb: Will you then be officially appointed CEO?
Joubert: Yes, I think it will happen in time. The board has no intention to look for anybody else.
ITWeb: The group experienced another major management shakeout at the end of last year. Why were there changes so soon after and will there be any more?
Joubert: A business is a dynamic, constantly changing thing. You need to make sure you have appropriate management at all times. All the managers who left played a vital role, but we needed people who are better equipped to deal with a business of this size.
ITWeb: Are all the positions appropriately filled now?
Joubert: Yes. There will be no more management changes.
ITWeb: It seems that all your troubles started after listing on the JSE. Was the listing really a good idea?
Joubert: Yes, it was a good idea. We wanted to grow quickly and become a dominant player in our market. As a listed company you have a different currency - your share - to do acquisitions. We made some major acquisitions [Computer Superstores and Businessland], and grew Enterprise Business Solutions virtually from nothing. We have achieved a great deal.
The criticism would be that we expanded too quickly and when you have such a rate of expansion, you pick up the problems we now have: a very big business that is not particularly well run.
ITWeb: What is your strategy for getting things right?
Joubert: Our focus is increasingly that of achieving profitability. We need to focus each business. In the period of growth, our businesses lacked focus. Now we have to go back to the basics and ask ourselves: Are we doing the best we can in this particular market?
ITWeb: Has the retail business perhaps lost its appeal due to low margins and lack of appreciation on the part of the investor community? Although the impression is that you have the monopoly.
Joubert: It is a highly hostile environment. There are a number of players - large ones such as Massmart and CAN, as well as smaller niche players. So we by no means have a monopoly, but the retail business has been struggling. It`s been a rough time with the level of disposable income going down and the rates going up. But the rates are coming down, and we have re-branded the stores and restructured. About 10% of retail staff have been retrenched. We have to focus on making it profitable.
ITWeb: You rebutted the rumour about Massmart taking over your retail business. But in our experience, where there`s smoke, there`s fire.
Joubert: Rumours seem to be endemic in this industry, but one often talks to other business people and one mustn`t read too much into it. I personally haven`t met a single Massmart person.
We are looking at a number of other options, with the objective of running the retail business effectively and profitably. Then we`ll look at what we want to do with it.
ITWeb: Which of your businesses is the major revenue contributor?
Joubert: Most of the turnover comes from the retail businesses, but the objective is to have one-third from each - training, enterprise and retail. Eventually, we expect the training and enterprise segments to outstrip retail.
ITWeb: What are your personal objectives?
Joubert: My objectives are the same as the company`s - to get back to basics, to the idea of identifying five critical aspects of the businesses and managing them according to set objectives and set targets.
ITWeb: How long do you reckon it will take to get the group back on track?
Joubert: Six to 12 months. We have a very good business, we just need to do some basic things right. Nothing revolutionary, just applying basic management principles.
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