David Kelham’s senior finance career spans over 30 years, mainly in blue chip companies, including Shell, P&O, NTL and Regenersis. We caught up with him as he prepared to come to the end of his most recent role as CFO of Cable and Wireless Communications Plc Caribbean Region, including The Bahamas.
So David, how did you wind up at Cable and Wireless (CWC)?
I was introduced to Cable and Wireless (CWC) by a mutual contact and met with the then CWC group CFO, Tim Pennington, after finishing the turnaround of what is now Regenersis. I was specifically asked by Cable and Wireless if I’d be interested in going out to the Bahamas, first of all, to complete the transaction of CWC buying 51 per cent of Bahamas Telecommunications Company (BTC), which at the time was 100 per cent government owned and, having finalised the deal, become the CFO on completion. So I left these shores in September 2010 and the deal was signed February 2011 and completed in April 2011.
New company, new country – quite a challenge then?
It was an exciting and challenging time. There was no competition in the Bahamas in mobile. There was competition in fixed line and broadband, but none in mobile. The deal included mobile liberalisation three years after the competition. So the job was about turning the business around and preparing it for competition. Cable and Wireless pulled a team together – one or two new people like me and a very experienced CEO who’d been with Cable and Wireless for a long time. We went in and worked with our Bahamian colleagues to turn the business around which included letting nearly 500 people exit the business, taking us from over 1,200 employees down to 700, and replacing major elements of the networks
What sort of results did such a huge turnaround achieve?
Profitability improved almost from the start and more than doubled in three years. The year ending 31st March 2014, we posted $128 million Ebitda against figures for the 12 months up to completion of the 51% acquisition of circa $60 million. It was by no means easy though. The people at BTC were great, but a lot of them had been there a long, long time and did not have experience of competitive markets. That said, the majority responded really well and we began to see positive results
What was the response of the CWC HQ to the impressive turnaround numbers?
In September 2012, I was asked if I would also take on the responsibility for the rest of the Caribbean as CFO, so almost overnight, I took on the additional responsibility for what is known as LIME – 13 countries around the Caribbean from Jamaica to Cayman and Barbados and also the ten countries in the Eastern Caribbean.
The business had been going backwards. It posted figures in 2010/11 of $229m EBITDA, 2011/12 of $193 million and was continuing down in 2012/13. Over the next two and a half years we put a new team in place and brought in some fresh thinking. We stopped the decline of the top line and sorted out a lot of the customer issues. Nearly $100m cost was taken out over 2 years. The network performance was improved. It worked well and we ended up taking the EBITDA from just over $150m in 12/13 to $238m in 14/15.
Impressive numbers. So now’s the right time to exit the business?
Yes, for a number of reasons. In November last year it was announced that Cable and Wireless were buying Columbus Networks, which is a large, privately owned business based out of the Caribbean, and that transaction finally completed on the 31st March, literally on our year end day. Although, I was asked to stay on again, I decided it was time to move on. I’d originally signed for two years and extended my contract twice. Another big integration would mean another couple of years commitment and, to be honest, my wife and I are homesick and ready to come home to the UK. It’s been fun and challenging and I leave knowing we’ve achieved more than what was asked of us. I’m staying on until the end of August, just to complete the handover.
So what has BIE’s role been in this international turnaround success?
Excellent interims have been crucial to the success at both BTC and LIME. As I’ve said, there were some great people at BTC when I arrived but they had limited experience of competitive markets and a lot of the financial day to day disciplines needed in high volume, low value environments needed overhauling. So in the due diligence phase, I designed what we needed to do and then bought in an interim through BIE to help implement new processes. We’ve also used an interim in BTC to implement VAT. There was no experience of that type of tax in the Bahamas because it was the first time it had been implemented, so BIE sourced an interim all the way from the Netherlands who brought first hand experience and expertise. And then, in LIME, I worked with BIE to source a number of different interims that have worked successfully on projects including property, shared services, financial systems, specific locations and revenue assurance and fraud management.
And what is it that you get from BIE that makes you keep coming back to them?
BIE were already providers to Cable and Wireless when I joined but I had already come across them before and used their expertise in the past on other roles. BIE have never let me down and the people that I’ve worked with who have been bought through BIE have always been outstanding. They always seem able to give you a shortlist of quality people and they’ve become my sort of first call because you can give them the brief and be confident that in a week’s time you’d have three or four good people lined up.
And finally, what does the future hold for you when you get back to the UK?
Well I’m nearly 58 now, I probably no longer want to work 365 days a year! My hope is that when I come back I can do some mentoring and perhaps some short-term crisis management where people just need a bit of help. I’ll also look at options around some non-executive directorships and charity work. But who knows, maybe in a year’s time I’ll become bored and want to look at other turnaround assignments, which is basically what I’ve been specialising at since I left what is now Virgin Media back in 2002.