Gresham Technologies plc

Software and services for data integrity and control

Visit the Gresham Technologies website
Status Current
Period Dec 10 – Current
Headquarters London, UK
Sources: Market cap LSE at 1 Sept 20, company financials FY19 and H1 20

Company
Gresham is a leading software and services company that specialises in providing solutions for data integrity and control, banking integration, payments and cash management. It’s customers include some of the world’s largest financial institutions and corporates, all of whom are served locally from offices located in the UK, Europe, North America and Asia Pacific.

Investment rationale

  • Established software business with a range of highly profitable legacy software revenues
  • Opportunity to build a new business in the reconciliations / data integrity space where market growth is being driven by regulatory imperatives
  • High levels of repeat business and software licence contract renewal (>90%)
  • Potential for significantly increase software revenues to scale up operating margins

Kestrel involvement, actions and impact
Max Royde was appointed as a non-executive director in 2009, when Chris Errington was CFO of the Company.  Together, they worked with the rest of the Board to formulate a new strategy for Gresham which was centred on the development of a new Clareti software product. Funding for this development was to come from a combination of cash flows from the legacy software base, non-core disposals and equity placings.

Kestrel acquired an initial 5% stake in 2010, and has since increased its stake, acquiring shares in the market and participating in fund-raisings to support the Company’s growth strategy. As at 1 September, Kestrel had a c.18% interest in the Company.

Over the course of Kestrel’s involvement with Gresham, we have led a wide ranging board restructure and were instrumental in the appointment of a very experienced Chairman with significant domain expertise. Changes to the board, including the appointment of Chris Errington as CEO,  were supplemented by senior management hires, including a high-quality development team taken from a market competitor.  Kestrel also led the creation of a management and senior staff incentive scheme, which established strong shareholder alignment.

Chris stepped down as CEO in 2015 but remained as a non-executive director until 2017. Max stepped down from the Board in 2016. They both helped oversee the Company’s transition from a collection of disparate businesses into a cohesive entity clearly focussed on delivering software solutions for data integrity and control, reconciliation and matching.

More recently, Kestrel has contributed to the funding of various bolt-on acquisitions and also supported management’s decision to move from one-off license sales to a recurring revenue model, which has significantly increased future revenue visibility.

“I would like to thank Chris for his many years of loyal service to Gresham. He has made a tremendous, transformative contribution to the Group, and he leaves with our warmest wishes as he pursues his other business commitments and interests.”

“I would also like to thank Max for the important contribution he has made to the Group’s transformation over the last 7 years. I have enjoyed working with him and the Board has valued his insight and advice.”

Ken Archer, Chairman