New brace of management at Maxima

(By Richard Holway 7.00am 27th Apr 09) Maxima has announced an interesting ‘brace of new hirings’. Graham Kingsmill (previously CEO at Netstore) joins as CEO and David Memory (previously FD at Netstore) joins as FD. Current CEO, Kelvin Harrison becomes Chairman – I assume ‘Executive’ not ‘Non-exec’ as Kelvin will ‘continue to be actively involved in the business’. Chairman Mike Brooke becomes Senior Independent Director.

It had already been announced that John Taylor, the current FD , had resigned.

You may remember that both Kingsmill and Memory had worked together on Netstore since they were appointed together in Sept 07. Netstore was sold 11 months later to 2e2 for £58m.

Kelvin Harrison told me that “we need to grab the opportunities for organic growth thrown up by the market whilst also being ready for distressed asset sales. We want to be a leader as the market moves into its next shape. We have been considering how best to do this for some time and the opportunity to add a matched pair to our top team was too good to miss. We needed an FD and there are a lot of good FDs on the market at the moment. We also needed to strengthen sales. Bringing in two people with a proven strong working relationship is a real risk reducer in achieving these goals.”

Maxima shares have halved since the start of 2009 – against the 21% rise in the FTSE SCS Index. Indeed they are a quarter of what they were in Aug 08. Of course, they were not helped by a series of profits warnings – the latest Profits Warning was issued on 18th March 09. We have questioned Maxima’s focus and small size in our previous posts. Maxima is a classic 'consolidator'. They have undertaken 11 acquisitions since their Nov 2004 IPO. Before that Maxima was the company name used for a merged Azur and Maxima. Maxima was an EPR supplier in the 1990s formed from an MBO at Minerva which then acquired Systems Team. Azur had been created out of Weir Systems and had bought Maxima in 2001 before acquiring IBS in 2004. That’s a pretty mega merger record! But I suspect that Maxima will soon end up on the other side of someone else’s consolidation process.