Spescom's new CEO speaks out

By Kimberly Guest for Spescom

Johannesburg, 25 Jul 2007

Spescom's new CEO, 36-year-old Jene Palmer, is ready to take on the job of turning around the company.

This is despite investor concern she may be too young to take its helm.

Palmer took the top spot earlier this month, following the departure of co-founder and CEO Tony Farah. Farah had been with the company since its inception 30 years ago.

Once a shareholders' darling, Spescom was hit hard by the IT sector crash at the turn of the century. With its shares currently trading at R1.64, it is far from its R19 trading highs of the late 1990s.

Give us a chance

However, Palmer - a nine-year veteran of the company - says investors should give the team an opportunity to deliver on its turnaround strategy.

"Companies are like humans - they go through good and bad cycles. Certainly, we've had some rough times due to slowdowns in the telecommunications arena, but we've only had a headline earnings loss twice in our 30-year history."

Additionally, Palmer points to the JSE-listed company's improving financial performance, noting this is the first sign of the success of its turnaround strategy.

In the six months to end March, Spescom reported revenue of R145 million. This was up 43% on the R101 million reported in its previous interim period. It also reported headline earnings of R2.9 million for the first half of this year - a marked improvement on the R11.3 million year-on-year and headline loss of R18 million for its 2006 year.

"We are seeing an uptick in industry activity and I am confident this will be reflected in our performance. The financial effects of this upswing may not be as evident in this financial year but certainly going forward we expect our results to be much better," she says.

Behind the strategy

Despite concerns over her youth and inexperience, Palmer says her performance to date should lend itself to investor confidence.

"I've been with Spescom for nine years and was made CFO and executive director in 2003. I have personally worked on the turnaround strategy, of which we are now seeing the benefits. And I intend to continue working on implementing that plan."

Palmer notes she is also not your "typical accountant" and has been hands-on operationally since she joined the company.

"I've come through the ranks of this business and that will count in my favour," she comments.

The next 18 to 24 months will see the company devote a lot of its attention to improving its approach to the market. This will largely revolve around customer service and overcoming misconceptions about its offerings through marketing.

As for following the market move to consolidation, Palmer will not be drawn on whether acquisitions are again on the table.

"I have a duty to shareholders to manage this business on their behalf. To say yes or no would be misleading; we have to evaluate each opportunity on its own merit," she concludes.