Newbury, Berkshire-based Enterprise Computer Holdings Plc, which traded until a few months ago as Systems Reliability Plc, has since refocussing on the mainframe services market reported interim pre-tax losses of UKP5m compared with profits last time of UKP9.5m, on turnover down 6% to UKP9m. The losses are partly attributable to UKP1m trading losses from the communication and maintenance division that has now gone in a management buyout, while UKP2m is accounted for in exceptional provisions for the mainframe division. The mainframe division saw turnover rise by 23% over the six months but incurred UKP4m in losses against pre-tax profit last time of UKP2.3m. These losses are blamed on five main factors: the rapid decline of the leasing companies, the company’s transition from wholesaler to retailer has not been smooth in France and Germany, stock levels have been too high, there have been losses on foreign exchange due to the strength of the dollar, and there have also been legal disputes with suppliers. However, the board is confident that action has been taken to ensure the profitability of the division in future. The integration services division has done exceedingly well over the six months, seeing pre-tax profit rise by 93% to UKP543,000 on turnover up 10% to UKP15.0m. The division is composed of Systems International and South East Computers. The latter is more of a box-shifter personal computer operation and is being merged with Systems in Brighton – South East’s operations in Hastings are being closed. The group still retains a 25% interest in the management buyout of the communications and maintenance divisions but orders in both divisions were running at under 50% those of last year and no real contribution is expected from them in the current financial year. Although Enterprise Computer sees these interim results as disappointing, it believes the losses to be due mainly to exceptional circumstances and do not reflect ongoing problems. The group’s current gearing now stands at about 25%.
