Logic Control SA, which saw six years of profit wiped out in 1992, is on the road to recovery even though it is still in the red. The company, based in Sabadell, just outside Barcelona, was forced to restructure following a disastrous year in 1992, when it showed a loss of $2.8m, but president Ramon Gracia Valles told Tribuna Informatica that the loss for 1993 had been cut to just $362,000 and considerably more cash flow was generated than in the previous year. Logic Control is a company specialising in software development and the distribution of hardware and peripherals, while it also provides maintenance services. Giving an an update on the current fortunes of the company, Valles explained that since the middle of 1992 Logic Control has embarked on a strict campaign of cost-cutting and has spent $724,000 making staff cuts. This expense was despite the fact that many of the personnel to leave had been on temporary contracts. Besides this, many services previously operating from its 16 regional offices have been centralised; consultancy and hot-line services now operate out of head office in Sabadell. At the same time, new products have been developed, mainly in the areas of business management and training. Valles is quite clear about the root of Logic Control’s problems, almost two years ago. In August 1992, the considerable reduction in hardware prices and profit margins led to a situation in which half of our business was in ruins, while the other half was healthy. It is not our strategy now to eliminate hardware as a line of business, but we no longer place the same emphasis on it. We now have to be more realistic and concentrate on activities with greater added value, such as consultancy, maintenance, programs and so forth. Our revenue from hardware is now 50% of what it used to be. Valles says that Logic Control’s software activities can be divided into two: new software which is holding up well, despite falling prices; and software maintenance, which is proving more successful. Logic Control is not planning to become involved in any grand alliance in the short term. Valles says it will continue to nurture what he refers to as ‘complementary contacts’ with some companies through English, French and German associations. He declares the company is well on course towards achieving its goal for the current fiscal year, this being to finish with a profit of just over $1m, while staff levels of around 435 are seen as stable.
