Groupe Bull, the French computer hardware and software vendor, points to a fall in operating income, together with the absence of the exceptional profits enjoyed in 1997, to explain its loss of $59.2m for the first six months, down from a profit of $10.7m for the same period last year. Revenues actually rose by 3.3%, to $1.96bn, during the first half. However, with re-training costs up from $20m through June last year, to $33.8m in the same period of 1998, while operating income was down from $32.8m in first-half 1997 to $17.4m. These factors, without the saving grace of over $40m in exceptionals from disposals of non-core businesses and exchange gains, caused the company’s results to sink firmly into the red. The downturn in the operating income, meanwhile, was attributed to increased investment in both R&D and sales and marketing efforts for the group’s software and smart cards divisions. Bull also cited the fact that, while the gross margin was expected in customer services due to an altered product mix, the improvement in margins on its other businesses (integration services, software development, smart cards and payment terminals) was insufficient to fully compensate. The group said it had not altered its performance targets for the year, and made no specific reference to measures designed to remedy the situation.
