Calluna Plc’s initial target at flotation of break-even by last June was missed and is now set for a year later, due mainly to supply problems, which the company said have now been resolved. The supply headache was the main factor behind increased interim losses at the Glenrothes, Fife-based manufacturer of 1.8 disk drives – one of only two left worldwide. The other was investment in product development. Pre-tax losses in the six months to September 30 were ú1.6m, up from ú1.1m last time. Turnover rose to ú1.1m, up from ú409,000 a year ago. The company is now happy with the supplier of magnesium die-castings it has been working with for a year, after the previous supplier withdrew from the electronics sector, and the new components are in full use on Calluna’s production lines. In November the company also signed a supply agreement with a Far Eastern company. Calluna declined to name either company. The 260Mb Callunacard drives will become the company’s main product during the current quarter, overtaking the 130Mb and 170Mb models. A third shift is being recruited at the moment which will be in place by the end of this month. The development team is concentrating on the 510Mb three-platter version of the Callunacard, which is scheduled to go into production in the second half. Distribution in the US has commenced and initial shipments are under way with some telecommunications and digital camera original equipment manufacturers, again unnamed. At the half-way stage there was ú6.5m left of the ú10.1m raised from the placing, and no gearing. The company said the next phase of expansion, involving a substantial increase in manufacturing output would be met from existing funds. The goal for the second half is to increase margins and hit the target of break-even by summer; no dividend will be paid this time.
