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December 6, 1993

AVESCO HAS TO RAISE UKP5m MORE IN PLACING

By CBR Staff Writer

The gestating Videologic Ltd operation has proved so burdensome to an already weak Avesco Plc that the parent is having to place just over 4m new shares through S G Warburg Securities Ltd. It hopes to raise up to UKP5m for short term working capital for VideoLogic. The company’s borrowings currently stand at UKP8.5m UKP4.5m of which is made up of finance leases and a medium term loan. A UKP2.3m operating loss from VideoLogic would not have been so bad if it were not for the shrinking income, and increasing losses from the company’s other divisions. Nevertheless Avesco still expects to float Videologic next year and says that it will be writing to shareholders about the move in the first quarter. The graphics-board division managed to crank up its loss, mainly thanks to its extensive research, development and marketing programme. Videologic launched its new range of boards at Comdex (CI No 2,293), but isn’t due to begin shipping them in any volume before March. Consequently the Videologic operation saw its turnover virtually flat at UKP4.6m. Still, the company says it is extremely optimistic about the sales potential of Videologic’s new products. The rest of the company deals in the television business, a boom area, you might think, but still subject to belt-tightening. Television Products, which make large pieces of iron, such as standards convertors saw turnover grow 3% to UKP1.7m, but its operating loss grew by 85% to UKP572,000. Of all the company’s divisions, the only one to make a profit was the Services Division, which provides television production and presentation facilities. Even here, the profit was sadly reduced – down to UKP759,000 from UKP1.2m last year. The company says that its presentations and display businesses were particularly badly hit as its customers limited their expenditure on events.

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