Supplier of computer systems, software and services, Vistec Group Plc has seen profits almost halved in the first half and forecasts that things will not get much better this half. This is despite turnover that soared 43.9% to UKP25m and last year’s restructuring of the company, which had helped lift profits last year. The year started well for Belper, Derbyshire-based Vistec with it reporting that trading was ahead of the corresponding period last year (CI No 2,468) but in the second quarter things deteriorated. Sphinx Level V, the Unix software distribution arm, which had ended its relationship with Informix Software Inc in the summer, still has not found a replacement. The deal represented 10% of Sphinx Level V’s turnover and around 2% of group turnover. And at recently acquired ISO Communications Ltd and Data Logic Communication Services Ltd, acquisitions that in last year’s accounts had kept the company profitable in the aftermath of the loss of the Informix account, there were cost over-runs on contracts and poor cost control which led to an actual loss of profit for both companies. Also, the personal computer price wars took their toll: margins were considerably reduced and maintenance contracts were renewed at reduced prices while new contract gains were fewer than had been hoped. Vistec says that things should have improved by the end of the year but shareholders should expect this year to be substantially down on last. Vistec appears to be pinning considerable hopes on Sphinx Level V signing a distribution agreement with the world’s leading relational database supplier, which should lead to a considerable increase in its business. The company has accelerated the integration of ISO Communications and Data Logic into Vistec Computer Services Ltd to cut costs and increase efficiencies but this will cost UKP350,000. Buying Data Logic (CI No 2,363), a network design, installation and maintenance firm was part of Vistec’s efforts to expand beyond its traditional base and diversify.
