The Glenrothes, Scotland-based manufacturer of tiny disk drives, Calluna Group Plc, duly launched a two for 11 rights issue at 50 pence a time, underwritten by Albert E Sharp, to raise some 4.7m British pounds to finance the introduction of the CT520 520Mb 1.8 disk drive. By virtue of its extremely small size, the drive has applications that extend beyond conventional portable computer use, with digital cameras being seen as an interesting one. It has also applied to have its shares, currently traded on the doomed Unlisted Securities Market, to be admitted to the full list of the London Stock Exchange. The company accompanied details of the rights issue by disclosing figures for the six months to September 30, saying that it lost 2.0m pounds pre-tax, up from 1.6m pounds last time, on sales of 779,000 pounds, down from 1.1m pounds. Reviewing progress, Calluna says it has now substantially completed development of the CT520, and expects it to be the highest capacity PC Card drive when it is launched – the only other survivor in the 1.8 business is Integral Peripherals Inc, which makes a 340Mb drive. Calluna decided that rather than go head to head with this, it would jump straight to the twin-platter 520Mb from its previous capacity of 260Mb – and also design in the more sensitive magneto-resistive heads so that it can more easily move on to higher capacities. The company is getting the drives manufactured in volume by IBM UK Ltd’s former Havant, UK factory, which now trades as Xyratex Ltd. Of the 4.7m pounds net to be raised in the rights issue, 1.23m pounds has been committed to installation of the necessary manufacturing equipment at Xyratex, which will remain Calluna’s property. Another 900,000 pounds will go on CT520 vendor tooling, 2.1m pounds is for raw material commitments and 470,000 pounds will go into the pot for working capital. Calluna has also persuaded Midland Bank Plc to make up to 4m pounds finance available, secured on its assets and its debtors. In the main, the 260Mb drive is still only being evaluated, but applications for which it is being considered include storage in ruggedized personal computers, vehicle navigation and entertainment systems, telecommunications equipment and digital cameras.
Altanta Olympiad
Callunacards were used in Canon Inc digital cameras to store photographs taken at the Atlanta Olympiad for use in US newspapers. Rotating storage has managed to keep not one but several steps ahead of all rival technologies for far longer than anyone would have forecast a decade ago, and Calluna reckons, almost certainly rightly, that the only convincing competitor for its 1.8 disks are Flash memory cards – or they would be if they did not cost $15 to $20 per Megabyte and get stuck at 175Mb capacity in a PC Card until the next generation of Flash chips comes along. Embarrassingly for the Flash memory manufacturers, disk drives cost only $1 to $2 per Megabyte – but that depends on getting the things into high volume production. Up to now, Calluna has been constrained by manufacturing problems on its earlier models of disk drive, which accounts for the low revenueand the delay in getting Calluna to a position where it can run profitably: it looks to its three-year pact with Xyratex to fix that. It will continue to make the CT260 until next summer, when a single-platter version of the CT520, also storing 260Mb, should be available.
