Leading a Turnaround > Having the Right CFO

Prior to 2018, disaster loomed for the data and insights survey company, Pureprofile.

A falling share price, lack of strategic clarity and disillusioned staff underpinned its challenged position.

The darling of the survey data world was in serious trouble – its days appeared numbered.

The acquisition of Cohort for $27m in 2016, weighed heavily on the company. Pureprofile thought it acquired a business that would deliver it positive cashflow, instead, it sent the company flagging.

What was needed was a people-focused CFO who work with the team to unite staff and help change the course of the company.

Who that was however, and where they were to be found, saw the company begin searching for its own dragon slaying, St George?

And along came Melinda Sheppard!

Sheppard is a former NewsCorp Executive, and a highly sought-after CFO. Her credentials made her the perfect candidate.

CFOs are typically risk averse, they fear venturing into the unknown, and the legends of Australian business, were never fearful. Their adventurous spirit helped shape Australia’s global influence – and Sheppard is of similar ilk, even though she’s not quite there yet.

And that’s how Sheppard views her role – one requiring courage and creativity to help turn Pureprofile around and set it back on the road to success.

Sheppard says, she was clear about what her role entailed, and needed – she threw the code of conservatism CFOs live by, out the door.

For Pureprofile it was time to re-emerge from the doldrums.

According to Sheppard, a major part of the company’s misadventure arose because of uncertainty and confusion. “It suffered an identity crisis. It kept shifting the goal posts and didn’t know whether it was a data or media company, and that was problematic.”

But all that changed. To Sheppard it was clear, a growth strategy, improvement in employee morale and attitudes were crucial to returning it to a position of strength.

Sheppard is experienced in turn around roles – Pureprofile isn’t the first company she has helped rescue. Implementing a hygiene program she says, “was critically important”.

Her first objective was to re-engage staff and change attitudes. “It makes the task of success easier and achievable.”

“As a company, Pureprofile is committed to its employees, and to turn a company around requires a collective team effort, working to achieve the same outcome. We care about our staff, where respect for our people is vital, and that’s who we are.”

Sheppard says the company is committed to corporate social responsibility and sustainability ESG programs as well as the health and wellbeing of their employees. “We have implemented initiatives to ensure we put our people first.”

‘Pure Wellness’ online workshops are held monthly to help with mental health along with a ‘Pure Movers’ program to get people out of the house and away from their computers for an hour a week.

“All of our global employees are offered free counselling services and we actively encourage a culture of openness and speaking up.”

For its team in India, the company created a more specific COVID support package in 2021 when the virus escalated throughout the region, including immediate cash payments and health cover for all its Indian employees, their spouses, children, and parents.

To turn Pureprofile around, Sheppard says she quickly implemented daily cashflow, engaged more resources and put people into the right jobs.

“We quickly worked out what parts of the business were and weren’t profitable”, and one of the key strategic moves was to end its relationship with certain outsourced providers.

The move to cut ties with several outsourced providers, brought about an almost instant attitude and morale change. It was a masterstroke. It allowed Shepherd to restructure and put people in the right jobs – deflated employees were now reinvigorated.  

Every role Sheppard’s held, has seen her success derived by auditing what’s most important, building on it and ensuring staff success and happiness.

“Any organisation’s success is underpinned by employee satisfaction, their happiness and how it respects and values its employees.”

With the support of its lender, in 2020, the company undertook a major recapitalisation program to strengthen its balance sheet and reduce its existing debt burden – a program that would allow it to change the business and improve on its EBITDA of 2018.

Under the recapitalisation plan, Pureprofile undertook a fully underwritten 8 for 1 renounceable pro-rata to existing shareholders rights issue to raise $18.80m.

The recapitalisation plan saw the company reduce its debt, boost its cash availability, allow it to shrink its ongoing costs and position the company for growth.

From that point, Pureprofile whittled away its $27m debt to $3m, connecting debt to equity back to the lender, with the lender forgiving the loan.

According to Sheppard, three things happened once it repaid the debt:

  1. $8m was written off
  2. the lender received cash
  3. and after debt to equity was recovered, a healthier balance sheet emerged.

Pureprofile used the proceeds of the entitlement offer to ensure it:

  • partially paid down the company’s existing debt
  • injected funds back into its sales team and global panel partnership
  • continued to commercialise its technology
  • provided working capital for the company and
  • paid the costs of the entitlement offer

During the 20-21 financial year, Sheppard said, the company undertook a massive shift and focus toward developing a new corporate strategy.

“With new CEO Martin Filz starting in August 2020,” Sheppard says, “that’s when a new corporate strategy was implemented, setting a new direction for the company and its flourishing re-emergence.”

Having cleared the decks on debt, a sudden emergence of client comfort to spend more with the company eventuated. It also assisted with the attraction and strong retention of very high quality employees.

“As an organisation, once you remove all the noise, it makes it easier to execute, and the staff and management have been critical in helping achieve that.

“And because of our strong, invigorated team, our company can continue to prosper.”