Changes afoot at BidEnergy

Guy Maine is the CEO of BidEnergy and Andrew Dyer is the new Chairman. I interviewed Guy Maine and the old Chairman, James Baillieu quite recently, and that was okay and it was all terrific, the shares had gone up quite a lot and on Friday last week, they announced that there was a new chairman, Andrew Dyer, taking over from James Baillieu and James Baillieu had effectively been sacked and the shares fell by a third! They were up a bit on Monday this week, but there was a huge fall, partly because I think, James Baillieu himself is selling out his shares and he's now sold all of his shares, and he told me that he'd been punched in the back of the head by them. They’d a meeting without him, he says, that Guy Maine had sent a text harassing his wife in the middle of the night, it was all terribly upsetting and he says they're now a disaster waiting to happen.

However, Guy Maine and Andrew Dyer say, and there are two sides to every story, of course, they say that James Baillieu wanted to take over management of the company and basically sack Guy Maine or at least demote him and the rest of the board decided that wouldn't be a good idea and decided to part ways. Basically, what they're saying is that it had come down to a choice between Guy Maine and James Baillieu, one of them had to go and the board decided that it was Guy Maine who was going to stay and James Baillieu had to go, so they sacked him and Andrew Dyer has taken over as Chairman. 

They reckon their strategy is still on track, they've just signed up a big customer in the US, a water utility, and they say that they're on track for cash breakeven in December this year, in the final quarter of this year. They are still on track for that, they say. After the last interview, I bought some shares, not that many, but I bought a few so I'm now shareholder of the business and have now made that declaration. But look, it's an interesting business, BidEnergy, for background probably a good idea to refer to the previous interview, which you'll find on the website and this one, in a sense, is an update to that.

Here's Guy Maine, the CEO, and Andrew Dyer, the Chairman, of BidEnergy. 

Listen to the podcast or read the full transcript below:

Guy and Andrew, can you just tell us why James Baillieu had to go?

AD:  Perhaps I'll lead with that, Alan. 

That's Andrew?

AD:  Yes, this is Andrew speaking.  Look, for whatever reason, James decided to put a proposal to the Board last week, which would essentially transform James' role into an Executive Chairman and changed and reduced the role of the Managing Director in the company and we duly considered those proposals and sought guidance from our constitution, our charter and just good practise for running a company and the Board came to a view that we should hold the line and hold the course with the current arrangement with the full-time Managing Director and a Non-Executive Chairman.  James indicated that he was not prepared to continue on that basis, so we made the appropriate changes.

Right.  Okay.  I actually have had James on the phone and he's told me that he was, "Punched in the back of the head," was the quote that he told me, what's your response to that?

AD:  Well, I'm not sure where that would come from, we held a board meeting at a time actually convenient to James and held the discussion and the outcome is now known to the market.

But he didn't attend that meeting, right?

AD:  He voluntarily chose not to attend the meeting, but did provide a statement to the meeting, which we considered.

He also told me, and this is a question for you Guy, he also told me that Guy, you sent an abusive text to his wife in the middle of the night and woke her up.  Did you?

GM:  No.  There was no abusive text that was sent, Alan, so no, there was a text that I shared with his wife and with James and the contents of that text were personal, I was reaching out to James and certainly deny that there was anything aggressive of any kind to Josephine, that's a complete falsehood.

Right.  Obviously, it's ended with James acrimoniously, it would be fair to say that, wouldn't it?

GM:  Yeah, well I think, look, James has formed his own opinion, he prosecuted that opinion last week, it was put to the Board last week.  Obviously, I'm sure you would expect that to the Non-Executive Directors, I defended my performance, which only weeks earlier was the highlight of the company.  I don't think that can change in a matter of a few days and I support the Board and obviously thank the Board that they want my role to continue in its current form and continue to perform for shareholders. 

It kind of came down to, it's either him or me, is that kind of what happened?

AD:  In essence, Alan, I think it's a fair summary.

Right and he's now selling all his shares, apparently.

GM:  Well that would be...

AD:  We're not in a position to comment on that, but...

GM:  Only he can determine that course of action, obviously, that's his private shareholding.

Okay, you've published a fair bit of stuff about Andrew Dyer, perhaps we can just hear a bit about your own background, Andrew, and what qualifies you to be Chairman of the business?

AD:  I've been on boards for many, many years, both private industry and government and statutory authorities.  I have a deep level of experience in governance and boards and chairing boards.  I've been associated with this company for nearly two years.  Originally brought in as a consultant, by James in fact, to help work through a range of things which led to some sizeable changes in the business.  I was then Board Advisor and then joined the Board formally in July of last year.  I've got material domain knowledge of the business, the people, the clients and the market and can help structure the company's governance arrangements for its growth path going forward.

Well, I'm a shareholder now of BidEnergy, I bought some recently after the last interview that I did with Guy and James and I was quite disturbed to see Anthony du Preez resigning as Director, but apparently, he's staying on as the Executive.  Is that right?  And he's still a part of the business?

AD:  Well Anthony is very important part of the business, he was a founder of course.  A large shareholder and he is our Chief Technology Officer, that has not changed.  But Anthony wants more time to focus on helping us grow the UK business and further developing the platform and just wanted to not have the extra burden of being a director at this point in time.  But he's still on the senior management team, he'll be at the Board table in a management capacity and we look forward to his continued incredible contributions to the company and his commitment.

Right.

GM:  Just to add to that, Alan, you know, off and on, Anthony's probably going to be spending more than a large amount of his time, I imagine it will be a number of stints in you know, hits of six weeks or so, to help get that business fully up and running.  Really, he's the key evangelist for our business, that's where his skills are best suited, and Anthony and I are 100% aligned, and I know he's as excited as I am about the future of the company.

Okay.  You also released your half yearly results today.  Just take us through what happened, you increased revenue, you’re still obviously burning cash.  Can you just take us through what changed, what's been going on in the business?

GM:  Yeah, well look, you know, we had a very strong last quarter to that half year, we grew by 35% in the December quarter and overall, in our annualised subscription revenues, that half saw 55% growth.  We are a growth story, that's continued and that's off the back of an ever-increasing pipeline of clients wishing to take up our product and you would have also seen there Alan, we've announced a couple of early new wins for this quarter as well.

What are those wins?

GM:  We've won into a large water utility in the United States, so for those listeners that have looked at our, or listened to our last podcast, we talked about how our growth strategy in the US was going to be one focused in the north east territories.  Aqua is a very large water utility company, covering just over three million people in the US and through the year we'll be adding sites, we’re starting with just over 1,000 sites for them and we'll be adding sites through the year.  It will end up being our largest, to date, US customer.

So how much revenue do you think you'll end up getting from them?

GM:  Well, I can't declare that now because we have...  It'll be quarterly additions, the best way to answer that is every quarter we will add to the ASR, or the annualised subscription revenue and we'll add to the site count so that our shareholders can see our growth performance.

Is it fair to say you're starting to get traction in the US?  Obviously, you are.

GM:  Yeah, well Anthony's just scooted off to the UK yesterday actually, and I'm joining him there on Wednesday, but we've got lots of opportunities there, but we still have a team in Philadelphia, they are doing quite well in terms of propagating our story and Joann, who's the big fabric retailer that we won its utility bill management business mid last year, they've ended up endorsing us and becoming an advocate for our business, it's been very useful to us in terms of encouraging new client additions.  I think we'll see some acceleration in the US off that.

How much cash are you burning at the moment on a sort of quarterly basis, and how much have you got in the bank?

GM:  Yeah, well we ended the half, which we reported, just on $4.1 million, we have had some receipts, we do have options that are being realised at the moment, so our cash position has actually improved over the first month or so in terms of this quarter.  Our actual burn rate, we highlighted in the 4C at end of December, that there would be a slight increase on our burn rate this quarter because we are adding some key development staff and some key sales staff into the mix but we retain our guidance to the marketplace that we will be cash flow positive on or before the December quarter this year.

Right, so that remains the plan, that's what we talked about last time. 

GM:  That's right.  That plan remains unchanged at this stage.

Okay, well, there's no point going into detail on the business because we did that last time, so any listeners can refer to the previous interview and it's good to talk to you again, thanks a lot.

GM:  Thanks, Alan.

AD:  All the best.

That was Guy Maine, the CEO and Andrew Dyer, the Chairman of BidEnergy.