17 JANUARY 2017 Alexandra Frean, The Times
WANdisco bookings are music to investors’ ears
A fraught game of musical chairs at WANdisco was left firmly in the past yesterday when the technology company reported record bookings and massively reduced costs.
Only three months after an extraordinary boardroom battle, WANdisco, which helps businesses to move data from their old systems to cloud servers, said that bookings had nearly doubled in the fourth quarter, rising from £3.1 million to $6.1 million.
Total bookings for the full year in 2016 rose 72 per cent to $15.5 million. The company cut costs dramatically and ended the year with a $7.6 million cash balance, up from $1.1 million at the end of the first half, thanks also to a $15 million placing announced in June.
The numbers were being seen by some as vindication for David Richards, chief executive, was abruptly sacked in September, only to be reinstated a week later with shareholder support, while the two directors who dismissed him, Paul Walker, chairman, and Ian Duncan, independent director, resigned.
Yesterday Mr Richards attributed the sales growth to the decision taken early last year to switch from direct to indirect sales through partnerships with original equipment manufacturers, such as IBM and Amazon Web Services.
“We made great strides in the second half of the year, but nothing has really changed; these were all things I was saying pre and post my return,” Mr Richards said.
“We now have IBM selling for us with a salesforce of 5,500 and they have even put their name on it, IBM Big Replicate. Getting IBM was a tremendous coup for us and very improbable for a company of our size, but we have a unique ability to solve a problem their consumers face in moving to the cloud.”
Since its initial IBM deal, WANdisco has secured several contracts. In December it won a significant deal with IBM for a multinational car company valued at about $1 million in royalties. This came after a $1.5 million order with a bank via a partnership with Oracle.
Mr Richards said that the company, which has offices in Sheffield and San Francisco, had a record order pipeline for the first half of 2017. He added that it was now seeking a new chairman familiar with both the software technology and the American markets.
WANdisco’s messy public row in October threw an unwelcome spotlight on a company once hailed as a rising star of the British technology scene. It floated in 2012 at 180p and the shares peaked in December 2013 at about £15, before plunging as it failed to bring in customers as quickly as some had hoped and as it burnt through cash. Its AIM-listed shares rose by 50p, more than 22 per cent, yesterday to close on 274p.
Analysts at Megabuyte said: “WANdisco has started to gain some traction with its partner network strategy and the company will certainly be keen to maintain this momentum during the current year. If so, we should start to see the growth in bookings show through to revenues.”