MRI, the medical and emergency services on the stock exchange, dumped its embattled chief executive officer, Phillip Makgalemele, in a desperate move aimed at stopping financial bleedings.
Impeccable sources told Sunday Standard last week that the board has declined to renew his contract, which comes to an end in December citing its unhappiness over his performance during his tenure.
It is believed that Makgalemele, who is also serving as the BFA president, will be taking an early leave from MRI, which is expected to start this week.
He took a company with an annual net profit of P 5 million and during the past two years it has been making losses of over P 1 million every year.
Further, he convinced MRI this year to fork-out about P 900,000 every year for the next four years with the hope that it would get an advertising mileageÔÇöwhich the board is bitter about the delayed results.
According to its latest full year to the end of June this year, revenues were flat at P 17.8 million and the poor results were blamed on the loss of the contested government’s road side assistance contract that has been given to its rival in the market.
And net profit slouched to P 3.3 million against P 4.5 million compared to the same period last year.
Operating costs for the year jumped up by over P 1 million from P 7.7 million to P 8.8 million as it gets under pressure from repeated administrative pricesÔÇölargely because of the international crude oil prices ÔÇô and good and services sourced from the USA and aircraft retainer fee.
‘The results are below expectation due to slow revenue growth. The less than expected results were compounded by cost increase, notably fuel prices which impact significantly on the operating costs of ground and air ambulances,” the company said.
Earlier in the year, Stockbrokers Botswana, which also acts as MRI sponsoring broker, warned the market about possible jaded results but also indicated that the company was embarking on a number of products and re-branding some in a bid to resuscitate its bottom-line.
“Prospects for the remainder of the year do not paint a rosy picture given the moderate success of the earning diversification initiatives of the call centre, metro, Road Side Assistance and training,” stockbrokers Botswana warned.
MRI further indicated that a spike in costs was due to the rise of imports sourced from USA through South Africa, 14 percent retainer fee hike for the company’s aircraft and an aggressive recruitment of paramedic targeted at enhancing the performance of its core business.
However, it said it had embarked on a comprehensive plan aimed at improving its bottom line. Some of the initiatives include an aggressive cost cutting plan, the launch of Zebra Card and the planned telemedicine product that comes to the market next year.
“A new initiative in Telemedicine will be launched in the new year that will significantly improve the capabilities of the emergency medical service personnel as well as provide opportunities for the company with the general health sector.
“ Our emergency service has further been enhanced with the purchase of a neonatal intensive care incubator which places MRI in the unique position of being the only service provider that can safely transport neonates,” MRI said.