20:20’s new Dutch CEO was unveiled this week as the 10 members of the company’s debt syndicate looked for some good news after a tough few months for the distributor.
New chief Meinie Oldersma arrives from IT distributor Ingram Micro just as the company absorbs the cashback collapses of Dialamobile and MobileMedia. Both were big accounts for 20:20’s airtime business, Dextra, and made a massive dent in the group’s profitability in October.
Dextra posted an underlying profit of £150,000 for October. The company had consistent profits of around £900,000 per month between October 2006 and June this year, dropping to £500,000 in August. Dextra was making profits of £2m per month in 2005.
The 20:20 handset and distribution business has improved to profits of £1m per month after figures were at a low of £60,000 in August.
The whole group, which includes 20:20’s operations in UK, Ireland, Spain, France and Dubai, as well as Dextra and AxCom, made a £3.1m profit in October, having set a target of £8.8m for the month earlier in the year.
20:20’s parent company, the private equity group Doughty Hanson, is scheduled to meet members of the debt syndicate on 15 February to explain why the targets have not been met.
One member of the syndicate told Mobile: ‘The performance is dire. They [Doughty Hanson] will have to show that they can cure it or the banks will take control.’
Lloyds and Barclays, two of three banks in the syndicate, are believed to have told other members that they want to see a turnaround quickly before any further slide in profits.
The appointment of Oldersma as CEO could herald that turnaround. The new chief executive has been welcomed for his experience in IT distribution, with many anticipating that Oldersma will make the company a prominent global distributor in IT and converged devices.
Oldersma had been at the helm of Ingram Micro’s operation in China since June 2004, presiding over a period where revenue more than doubled. It has prompted speculation that 20:20 could extend its operations into China.
20:20 has also withstood the assault from American-based Brightstar, which has yet to make an impact on 20:20’s domestic UK market.