A major turnaround of beleaguered data company Cirata - formerly WANdisco - has been akin to starting from scratch and has required "root and branch" restructuring, its new boss has revealed. Stephen Kelly, the former Sage CEO who took the helm of the Sheffield-based firm in May last year, said he came to the company which had gone from being a celebrated tech darling to hitting rock bottom. The veteran FTSE boss said the 2023 financial year saw a business at standstill following in March that "potentially fraudulent" activity centring on one senior salesperson could wipe as much as £12m off its revenue. In 2023 results published on the
London Stock Exchange, Mr Kelly said dealing with the fallout from the crisis resembled the task of Sisyphus and brought a "seemingly endless" stream of "whack-a-mole" challenges as the scale of the problems became apparent. In a review of the year, Cirata - which rebranded from WANdisco in October in a bid to help restore its reputation - said it had also emerged that only 20% of a promising 12-month sales pipeline had become a reality, with some deal values overestimated. The results said that a rescue plan implemented by chair Ken Lever, who was appointed in March, found that governance was lacking across the company. Such legacy issues were said to be a distraction for management as unexpected challenges led to late nights and weekend working. Under Mr Lever's plan Cirata installed new governance policies and controls; completed a £23m-plus equity fundraise, around $8m of which was swallowed by turnaround advisors fees and an audit of the 2022 financial year, bringing in new board members and readmitting the company's suspended shares to trading on AIM. The latest results show the firm generated revenue of $6.6m in 2023, down from $9.6m the year before, as operating losses narrowed from $40.9m to $32.4m. Mr Kelly said it was only post-October 2023 that any semblance of normality returned to the firm with management using Q4 to plan for this year. He also pointed to problems with the working culture of the loss-making business, highlighting a four-day week, unlimited holiday and working-from-home as issues. Mr Kelly's review of the business began with a well known passage from Charles Dickens' 'A Tale of Two Cities': "It was the worst of times, it could be the best of times, it was the season of light after the season of darkness, it had been the winter of despair, it could be the spring of hope." He went on to say: "FY24 needs to evidence a transition to growth. The platform and team that we have in place now have been set the challenge of delivering on that transition. Arriving to this point has not been easy and there is a lot more work to do. If only to express gratitude to everyone on the Cirata team who has worked tirelessly to put us on this better trajectory, I want to give some sense of the work that FY23 required. "Internally, the post 9 March 2023 announcement (the "irregularities") discovery period extending into late 2023 resembled the laborious task of Sisyphus. Reactive surprises, rear-guard activities and unexpected challenges occupied late nights and weekends. The situation demanded continuous firefighting. We were experiencing a seemingly endless series of "whack-a-mole" challenges. "Soon after 9 March 2023, some customers and partners placed the company on their "watchlist", leading to a pause in activities and the then embryonic sales pipeline coming to a standstill. For a period, the only substantial executive interaction with certain customers and partners involved reassuring their compliance teams. It wasn't until post-October 2023 that any semblance of normality returned, with Q4 2023 providing an opportunity for management to proactively plan for FY24. "Despite good technology, talented colleagues, and marquee customers, the company struggled to grow sustainably. The reality is that, since its IPO in 2012, the company has raised $270m but without delivering consistent sales momentum."