Shares in Videologic Group Plc eased back 4.5 pence to 71 pence on publication of the annual results, a reaction that will confirm the company’s feeling that a British technological success story never receives the appreciation on the London market that similar companies enjoy in the US. But the company has given shareholders a bumpy ride. It parted company with its chief executive at the end of last year after dismal first half results and city confidence plunged (CI No 3,304). The question mark over so many British companies is not the technology but their ability to exploit it. But Videologic’s second half has given some cause for optimism and at the end of May the company finally signed a deal with Sega for its new PowerVR 3D graphics chip for Sega’s Dreamcast console (CI No 3,417). This will be rolled out in Japan at the end of this year and in the US and Europe in the last quarter of 1999, backed by a $100m promotion budget. Quite apart from the royalty stream, the credibility of a win on this scale will help it in the arcade machine, PC and set-top box markets. While Videologic claims a technological lead over arch-rival 3Dfx Interactive Inc, the competitive nature of the industry means that no company can ever be sure that it can keep its nose in front. Videologic is, at least, switching the emphasis from shipping boards to looking for royalties from its designs and has a close relationship with NEC. The current figures bear the cost of reorganization, in particular closing its office in California but the appointment of Dr Hossein Yassaie as managing director leaves the company confident that the board has now been strengthened. All Videologic now needs is the kind of financial results that prove the success of its technology and its credibility in the city will be considerably enhanced.
