Holmes Report 29 Jan 2013 // 12:00AM GMT
SAN FRANCISCO — Bite chief financial officer Hamish Macphail is departing the firm, with interim CFO Leon Hunt assuming the role on a permanent basis from the beginning of February.
The development was confirmed by Bite global CEO Andy Cunningham. Macphail’s departure is not related to the “complex fraud” discovered at Bite late last year, in which a senior member of his financial team reportedly embezzled approximately $3 million from the company.
“My decision didn’t have anything to do with the fraud and it didn’t have anything to do with Hamish’s performance,” Cunningham told the Holmes Report. “He had no involvement with the fraud and was a large part of the reason it was discovered…I just needed someone in this role who I have worked with before.”
Since February 2012, Hunt has been CFO at Series C, a consultancy that Cunningham launched last year. He previously worked with Cunningham for eight years in the 1990s at Cunningham Communications. He was brought on as a contract CFO for Bite last November when investigators required that all senior members of the financial team not report into the office until they had been cleared of wrongdoing.
Macphail departs Bite after almost 15 years with Next15 agencies, including 13 years with Bite.
“Hamish was cleared in December and was back in the office in January,” Cunningham said. “He’s been working closely with [Hunt] on the transition.”
The fraud resulted in profits at Next15 to decline 21 percent to $9.6m for its 2012 fiscal year, which ended 31 July. In a trading update released today, Next15 CEO Tim Dyson said that the company has completed its investigation and “this has been handed over to the various legal authorities.”
“I expect there will be news that comes out of that as it works its way through the legal system,” said Dyson. “The good news is, it really now means we can focus back on the business.”
Next15 chairman Richard Eyre added that the cost of the investigation has added approximately "£300,000 to this financial year."
"The additional on-going resources will cost around £250,000 per year, but this cost will only start in the second half of this financial year," added Eyre. "In concluding the investigation we believe there will be no further write-offs beyond those already outlined in the last annual report."
Eyre also said that the investigation has resulted in new procedures being implemented and additional resources being added to the finance team.
"Without the one-time costs relating to the fraud investigation and resulting staff changes, the group is expecting to meet management targets for the full year, but first-half profits will be held back by the planned investments in the new insight business and staff transitions in some of the traditional businesses," said Eyre. "The group’s balance sheet remains strong, which enables it to continue to look at a mix of organic investments and acquisitions, which it is actively exploring."
Dyson said that the year ahead will see Next15 step up its focus on acquisition, in a bid to put a “strong balance sheet” to work. He also noted there will be more news about the launch of a new analytics business, headed by former Bite CEO Clive Armitage.
Cunningham succeeded Armitage as Bite chief at the end of last year, after taking charge of North America in early 2012. Hunt previously worked for The Hoffman Agency from 2000 to 2012. He will maintain his role as CFO for Series C, in which Next15 has a minority stake.