You’re fired: Bouris sacks staff as questions go unanswered

In less than two weeks’ time, Australia’s answer to Donald Trump, Celebrity Apprentice’s business superstar, Mark Bouris, will be strutting the stage at the National Achievers Congress in Brisbane to share the secrets of success with hundreds of his adoring fans.

The “unprecedented” program at the Brisbane Convention Centre will unveil “Mark’s critical steps to budiling (sic) security for the future in today’s tough economic times.”

So it will be interesting to see how he manages to weave the story of teetering technology company, TZ Ltd, into his narrative.

Yesterday, the company, of which Bouris is executive chairman, announced an unspecified number of job cuts and US$1.5 million in annual cost savings to bring expenses into “line with forecast revenue and profitability expectations”.

Poor TZ has been struggling for years with its hi-tech fastener business (and was in deep doodoo when Bouris rode to the rescue in 2009), but it’s now hit an even muckier patch, thanks to its recent failure to sell secure postboxes to Australia Post. And investors are really in the poo.

Back in November 2010, the company raised $12.7 million from its shareholders in a private placement and a 1-for-3 rights issue at 35 cents a share. This February, it raised another $4.5 million at 32 cents a share. Since then, the price has plunged to 8 cents and almost all the money has been spent.

Some of the cash raised from investors has flowed out to Bouris, who has drawn $838,000 in salary over the last two years as part of his $1.7 million annual remuneration package (which includes free shares and options).

A bit more has gone to Bouris’ companies, like Yellow Brick Road Wealth Management, which charged TZ a total of $1.19 million for rent, accounting fees, storage and marketing consultancy during 2010 and 2011.

Only a few months ago, in October 2011, TZ’s report to shareholders carried a full-page picture of the business wizard, saying “I have never been more excited about the future of this company as (sic) I am today.”

Bouris told investors he had got involved with TZ because he saw the potential of the solutions it had created, and added, “I’m proud to say that leading into 2012, that possibility I saw in the beginning of my tenure with TZ Limited has become a reality.”

So what went wrong, and how hard will the cuts bite? This morning, we rang TZ’s Chelsea O’Donnell, who is listed on previous media releases as TZ’s public relations manager. And our conversation went something like this:

“Hi Chelsea, I’m Paul Barry from The Power Index, I was hoping I might ask you a couple of questions about the cuts announced by TZ yesterday.”

“I’m sorry, I work for Mark Bouris’s company Yellow Brick Road.”

“But you’re listed as the public relations manager for TZ?”

“I can’t answer questions about that company.”

“What do you mean? What else does the PR manager do apart from answer questions from the media?”

“Mr Bouris is executive chairman of TZ Ltd, and he’s the only one who can answer questions, but he’s out of the country and unavailable.”

“Well, can I ask whether one of the cuts involves a cut to Mark Bouris’ salary?”

“I don’t know.”

“Would you be able to put that question to him?”

“I’m sorry, he’s not available for comment.”

No doubt the people who pay $195 a pop to hear Bouris in Brisbane will be able to ask that question themselves, and perhaps follow up with one about the secrets of good PR.

In the meantime, TZ has not lost confidence in the future. Yesterday’s announcement to the ASX said the company was still on track to “delivering continued growth” this year and expected to hit break-even by the middle of 2013.

That won’t be a moment too soon. In the six months to December 2011, TZ was burning cash at the rate of $900,000 a month and had only $1 million in the bank. Since then, it has raised another $7.5 million in loans and equity, but (after 7 months of continuing cash burn) it could well be running short again.

In times like these, Bouris and his shareholders will need nerve and a little luck. But we’re sure he won’t be found wanting. In his message to shareholders last October, Bouris told them: “We have the greatest minds in the industry on our team, and these people will be vital to cement TZ Limited as a global leader in our field.”

This article first appeared at The Power Index.