COPENHAGEN (Reuters) - Denmark’s Simcorp, a provider of software and services to the financial sector, expects to get back on track in the United States within a year, after replacing poorly performing managers, its chief executive told Reuters on Thursday.
Simcorp cut its 2014 revenue growth forecast last week because of a weak performance in its U.S. business, which contributes around 18 percent of total revenues but where no contracts have been signed since June 2013..
“It started well, but then the orders we had expected kept being postponed so we turned on a big searchlight and a couple of months after we fired the managing director and the sales executive in April (this year),” Chief Executive Klaus Holse said on the phone from Iceland.
Holse said former management failed to organize an increased sales force and so lost out on business opportunities. The firm has now appointed a director with experience from a business twice as big as Simcorp‘s, he added.
James Corrigan, who came from competitor Sunguard, started on Wednesday as managing director of Simcorp in North America, although a new sales executive has not yet been found.
“In the period where there’s no management in the U.S. things will go slower and we don’t expect new orders in the U.S. this year. But in the second half of 2015, we expect to be back on track,” Holse said.
Simcorp’s software is designed to manage the flow of securities trading from start to finish, including back office processing. The company, which generated operating profit of 54 million euros (701 million) on revenues of 225 million euros last year, has a global market share in its industry of 14 percent, but only 4 percent in the United States.
Because Simcorp’s European business depends on maintenance contracts, the U.S. market is essential for new growth.
Last year, Holse told Reuters Simcorp was targeting large U.S. asset managers in pursuit of double-digit revenue growth..
On Thursday, he said he was still betting on North America as the company’s biggest growth opportunity.
“The market has not changed, it is our execution that has been wrong,” he said.
North American revenues account for less than a fifth of the company total and are currently generated from just 22 clients, including Wells Fargo, Lord Abbett and Bank of Montreal, out of 500 potential clients identified by Simcorp.
Shares in Simcorp are down 25.5 percent this year undeperforming a 17.2 percent rise in the Copenhagen’s benchmark index.
(1 US dollar = 0.7609 euro)
Editing by Sabina Zawadzki and Mark Potter