Fuse8 chief executive officer Nigel Hunter has been relieved of his position after he failed to provide an updated review of the company’s performance and an estimate of performance for the remainder of the year.
The company has announced that on 26 August, Hunter offered his resignation, which was not accepted, however following the discovery of ‘other issues’ an internal investigation and review was launched.
The company’s financial performance is expected to be below expectations for the first six months, while the board has also said it is not confident that it will achieve market forecasts for the year.
In June, the company announced a growth in turnover of 12%, increasing to £5,06m while its revenue was reported to have grown to £3.60m.
“This will be very disappointing news for shareholders and for the dedicated and hardworking employees of the Company as new business activity is strong and the Company has a solid team of skilled staff who are delivering great work to their clients,” said a company statement.
“In light of the above it appears that whilst the original strategy set out on the Company's admission to AIM remains sound, these operational issues mean it is now unlikely that the Company's plans will be fulfilled in the short to medium term. Therefore the non-executive directors are now considering what course of action is in the best interests of shareholders. A full range of options are being considered."
Possibilities could see the company delist from AIM and undertake a restructuring to lower it outgoings, while a sale of the operating businesses of the group could also be an option, which would see the corporate entity evolve into 'cash shell' with a remit of buying other businesses.
No offer has been received for the company by the board which plans to complete its review in as short a period as possible and will update shareholders in due course.
Hunter's phone appears to have been disconnected while The Drum was told that "no one at the agency would speak at the moment."
Share in the company slumped by 28% in the hour since the announcement was made.