The market sent shares in database marketing software group Alterian down nearly 12% at one stage this morning following an update to mark the arrival of its new CEO, Heath Davies, earlier this month.
Bristol-based Alterian, which recorded a pre-tax loss of £4.29m in April and has since replaced both its chairman and chief executive, said in a statement to the Stock Exchange that having successfully implemented a range of cost saving initiatives earlier in the year, the review will examine the company's positioning in its target markets to ensure it has the appropriate level of resources required both to achieve a leadership position and to create shareholder value.
Against this backdrop, and taking into account any changes made to the business, the board will also review financial reporting, forecasting, revenue recognition and the valuation of intangible assets currently shown in the balance sheet.
It makes clear,"for the avoidance of doubt" that the review is not investigating an option to sell the business.
Alterian says it expects to complete the review in time for announcement at the interim results in November and – as an initial step – its year end is to be moved from March 31 to the end of the calendar year,to December 31.
It says this will allow the company to measure the new business structure for a full accounting period, taking into account any changes in financial measurement and customer contracts. The new business plans will be formally measured from January 2012 and guidance on forecasts will be given in November.
Consequently, it will announce preliminary results for the nine months ending December 31 in March next year.
The news was welcomed by analysts Cannacord Genuity who issued a note this morning retaining their HOLD stance adding, however, that "our multiples-derived price remains relatively high at 110p (against 67p this morning) given our belief in the long-term value and opportunity inherent in the business".
They add that Alterian has already seen its cost base lowered earlier this year and are not expecting further dramatic incremental changes.
"However," say Cannacord, " we find it reassuring that the new members of the exec team will be making the strategic plan 'their own' rather than inheriting the work of others."
They will revisit their forecasts, target price and recommendation once full details of the review process and guidance for 2012 are available in November.
Meanwhile, Investec Securities, said in another note that they have placed their forecasts under review and, for now, have moved the company to 'not rated'.
The market sent shares in database marketing software group Alterian down nearly 12% at one stage this morning following an update to mark the arrival of its new CEO, Heath Davies, earlier this month. 
