Guernsey Press

PraxisIFM Group moves to turn around a £2.7m. loss

A NEW team heading one of Guernsey’s biggest financial services companies is helping turn around a financial loss – after ‘shortcomings’ in its acquisition strategy and organisational structure.

PraxisIFM Group chairman Andrew Haining (left) and chief executive Officer Rob Fearis (right). (28729928)

The PraxisIFM Group recorded a net loss of £2.7m. in its annual results for the year ended 30 April 2020 compared to a profit of £9.7m. in the previous 12-month period. Revenue rose by 7% to £60.5m. compared to £56.3m. The disposal of InAdmin RiskCo Group was also highlighted.

PraxisIFM chairman Andrew Haining noted how the senior management team, led by Rob Fearis – in place since early 2020 – had quickly drawn lessons from the previous three years and implemented a ‘considerable number of changes’. The measures should see a significant improvement in profit and cash conversion during 2020 and into the future.

‘The unforeseen external impact of Covid-19 globally has affected all of our operations in the last quarter of the year,’ Mr Haining also said.

‘Additionally, the group has had to recognise some shortcomings in both its acquisition strategy and its organisational structure. Faced with these challenges, we realised we had to ask some uncomfortable questions, make some difficult decisions, and move speedily to refocus on our core business strengths.

‘This strategy has come at a cost, but we believe it is a cost that will produce a more efficient and robust business, one that is fully equipped to adapt and grow in the coming years.’

Mr Haining added: ‘Through all this, the group continues to generate good organic revenue growth. The key target for the management team is to ensure that this continued revenue growth can be converted into gross and net margin performance.

‘I am pleased to report that considerable progress has been made in the last quarter of the financial year in reducing our cost base which means the group is already making good progress towards achieving its target improvements for the coming year.’

n In a further trading update following the release of its annual results, PraxisIFM said performance had ‘improved significantly’ during the quarter ended 31 July 2020 with results in line with budget. ‘The new senior management team appointed earlier this year continues to work towards improving the financial performance of the group,’ said the statement.

n It has been announced that Mr Haining and Iain Stokes have decided to stand down as chairman and director respectively. Mr Haining will retire from his position when a successor has been appointed. It is envisaged that this process will be concluded by 30 April 2021. Mr Stokes’ retirement date is yet to be confirmed.

Rob Fearis, chief executive officer of PraxisIFM, said: ‘The performance of the group in the year has been disappointing. We fully acknowledge this and have reacted accordingly. The new team has, in a very short time and under challenging operational circumstances, thoroughly analysed the issues and put remedial plans in place. A number of initiatives are underway to create integrated efficiencies and build on our core strengths. We are confident these actions will bring about a positive and consistent change in our overall performance.’

Exiting from IARG had been an important step, he said in the annual report, primarily allowing the group to focus on its core competencies as an outsourced administration service provider and move away from software development.

‘The use of leading technology is a vital part of what we do to remain highly competitive, however it is crucial we retain the freedom and flexibility to acquire the best and most effective solution available. The exit enabled us to move forward without the distraction of a business that is outside our core competency, one that would require significant management time and expense to monitor progress and performance effectively. We wish the IARG team every success.’