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DATA MAGNETICS WINS UKP2m IN NEW FUNDS

Data Magnetics Ltd, the thin-film hard disk platter manufacturer set up by ex-Control Data UK staff in 1985 (CI No 177), has won a further UKP2m in venture capital backing from its existing investors. The new money takes the Deeside-based company’s total backing to UKP17m since it started. The original investors, Investors In Industry Plc, Citicorp Venture Capital, Baronsmead, Metal Box Plc, Pilkington Plc and Rodime Plc have contributed a total of UKP7m in equity funding with the Department of Trade and Industry, the Welsh Office and the Welsh Development Agency providing over UKP5m in grants. Data Magnetics has also received UKP1m in the form of an investment loan from British Coal Enterprises, the job creation arm of British Coal whose closing of much of the nearby Shotton steelworks has removed the major source of local work. Despite estimating losses for the year to June 1988 around UKP1.5m, marketing director Paddy Carlin says the company should breakeven month-by-month in the second half of next financial year. Turnover this year will be about UKP2.5m with platter shipments of 400,000 to 500,000 units. By 1989, Data Magnetics hopes to have captured 65 to 70% of the European market. To become profitable, it forecasts it will need to have a yield of 37 to 40% of the units started. Its current figure is barely 30%. The Deeside plant, which is claimed to be cleaner than most hospital operating theatres, is the only one of its kind in Europe and the only one able to produce 3.5, 5.25, and 8 platters in the world. Despite all the investment, the company still needs several million pounds more. Managing director Dennis Mahoney warns that the myopia of investors in this country could kill our sort of business. The company is, he says, high tech, high risk but high reward so the City must begin to take a longer view of technology. Investors may only have to wait another three to four years for a good return. Recent market research indicates that sales of thin-film platters have overtaken traditional oxide ones. In the last 12 months, IBM, DEC, Olivetti and CDC all launched their first thin-film drives.

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CBR Staff Writer

CBR Online legacy content.