A complete regime change needed starting with the CFO Hi All,
I recently had a debate with an associate about my statement that Lorenzo DiMarchi would never get hired as a CFO at another Canadian publicly traded company. My associate maintained that because he has been a CFO at Torstar since 2009 that he must be qualified to be a CFO somewhere else. Let’s look at his track record and see if you’d hire him for your corporation.
· Revenues in 2009 - $1,451 million; Revenues in 2017 - $616 million representing a 58% decline.
· Operating profit in 2009 - $95 million; Operating profit in 2017 - $7 million representing a 93% decline.
· Cash from operations in 2009 - $153 million; Cash from operations in 2017 - $15 million representing a 90% decline.
· Shareholder equity in 2009 - $679 million; Shareholder equity in 2017 - $246 million representing a 64% decline.
· Dividend per share in 2009 - $.37; Dividend per share in 2017 - $.10 representing a 73% decline.
· Sold Harlequin with no plan to replace the earnings. In an act of desperation invested $180 million in VertigoScope with no exit strategy; no access to cash and no diversification strategy.
· Star Touch was a $20 million + debacle with no due diligence to validate the fantasy projections provided by LaPresse.
· Look at the portfolio of failing or failed initiatives on his watch – The Star paywall probably has less than 10,000 paid subscribers; StarMetro and the investment in resources against declining revenues; the botched Postmedia transaction; Workopolis was a squandered opportunity and failure; Olive Media's closure and failure; Shop.ca which was an abject failure from the outset; WagJag another copycat failure; VertigoScope which is hiding behind acquisitions that shield investors from understanding the rot within the core business; the complete lack of a coherent strategy for which he should be partnering with the CEO.
· This is from Boynton’s statement in the 2017 Annual Report - “Our new path forward rests on four pillars: first, a deep customer-centric obsession; second, journalism excellence that fuels change while engaging consumers and clients that in turn generate profitable revenue; third, an advanced data-driven competency; and fourth, a culture that is selfless, focused, agile, extremely collaborative and results-driven.” Pure corporate speak for we have no idea and in this, the CFO is his primary partner.
· A competent CEO would have determined in 3-6 months if he had a competent CFO in the same way as a competent Board and chair would know the same about the CEO and CFO, they’ve entrusted to run the business. I don’t know if the value destruction on this CFO’s watch is unprecedented, but it surely points to complete dysfunction from the Board on down. The entire regime needs to be changed out and a new owner will clean house in the first week.