Its all change at RDT, with a new leader at the helm in Paul Watts - the former Blue Prism man - who has stepped up as Roger Bullen moves on.
Additionally, CFO Ash Mehta is also departing in a couple of months to pursue another opportunity.
Such change hasn’t exactly whetted investors appetite, the shares easing back on the news, along with a pre-close trading update that was largely in line with expectations.
But, despite the negative reception as a holder of shares in RDT, I’m not about to head for the exit door, rather, I am keeping close tabs here with a view to even adding around current levels.
Last week, I caught up with both Ash Mehta and Paul Watts for a chat on where things are at, along with importantly, how the CEO sees things and where he hopes the business will be further down the line. Watts, who only joined the company last August as Chief Customer Officer, brings with him not only a wealth of experience across the sector, but an apparent drive to push the business forward. Whilst long suffering shareholders could be forgiven for reaching for a large pinch of salt given past false dawns at RDT, they equally, may wish to stick around to see just what transpires under Watt’s tenure.
The new man tells me that he believes that there are certainly enough assets within RDT on which to deliver and build further, but to date, they really haven’t been properly productized. This, he says, is a key initiative for him now as they really are looking at a very large market opportunity, particularly across duty and customs management.
Clearly, Brexit has heightened prospects in this space, although Watts says that it is actually quite big regardless of that.
What is clear, according to government, is that some 320k companies now have to make custom declarations which they didn’t have to do before and that bodes well for the business.
The CEO adds that fundamentally they now have a platform within the cloud that can execute across the customs space and they are very much looking to score in this area.
Leading the way here is the Langdon offering within RDT which was acquired for a snip, although it was not bought specifically for the post Brexit opportunities that arose.
However, with that opportunity presenting itself CFO Mehta says that the team worked very hard to get their system up and running from the beginning of January, following the late Brexit conclusion.
Watts acknowledges that they may be one of many players in the space, but equally, a rich heritage along with legacy and a strong offering, can see them taking their product to market and winning business.
Indeed, progress is already evident as the CEO says that they are gaining customers regularly with close to forty already on board for the Langdon product.
Additionally, RDT already works with some big blue chip names which is a testament to the offering and the significant cash raised last year provides it with a strong foundation on which to build further.
Both Directors recognise that having a strong cash balance is something of a prerequisite when working with or for major names, such as British Aerospace or NBCUniversal, so to that end, there will be no throwing caution to the wind or splashing the cash.
Watts is unequivocal on the matter, particularly when it comes to potential acquisitions which do not appear be on the horizon anytime soon. Such a move could well come, but not until the business reaches an inflexion point and meets the goals that are being set out.
He reiterates that there is enough in the existing assets to leverage and drive growth organically and that is clearly his aim, where he says that on this front there will be news keeping investors very much up to date as they move forward.
A number of changes and inward investment looks set to take place which have been identified and these should prove beneficial in the strategy.
Some aspects will prove to come on a regular basis with something perhaps emerging fairly soon, whilst others will take longer as he is sets about his path to deliver.
He also adds that the business needs to be more aggressive in terms of revenue generation moving away from a growth plan that historically was very much focused purely on spend analytics. In the past, RDT has announced a number of small contract wins at various points, but it appears going forward, the focus will be more on packaging such gains into something arguably more meaningful.
From an investment perspective, if the new man can show signs of delivering on his firm aim of cash generation and positive cash flow, then the shares could quickly reverse the more recent downward trend. He also points out what others will already have discussed in appraising the merits of investing in RDT, that a number of peers are strongly cash flow positive and the company should be doing the same.
According to the RDT twitter feed the company appears to have been in hiring mode recently which would seem to indicate a mixture of some departures along with an injection of new blood.
No bad thing for a business that has the ability to deliver, but perhaps needs some fresh ideas and invigoration as it steers through a period of transition.
Watts says that it is inevitable that when change comes some will welcome it whilst others will not and it his mission to execute on his strategy.
With a market cap of £17m, net cash of close to £6m and a historic high level of recurring revenue, the shares are hardly expensive, particularly in comparison to peers.
However, that sentiment and rating is driven by performance and upside potential will no doubt be aligned to actual evidence of growth emerging.
Watts appears to have the bit between his teeth though and with a wealth of experience must have a good chance of delivering and growing the business into one that can generate cash and grow.
The pandemic hasn’t been kind to many across the space, although there have been some that have clearly excelled, so for RDT as the economy continues to open up, there should be increased opportunities and the inking of new contracts.
With plenty of cash and a new impetus, investors eyeing the medium to longer term could be well rewarded, which is why I’m sticking around and watching events closely.