Datrontech Group Plc has had enough of fluctuating memory chip prices and it is continuing to diversify away from its core activity of distributing memory products. The strategy appears to be working with the Aldershot, UK company reporting net profits for the year to December 31 up 31.1% to 5.1m pounds. Revenue for the year rose 59.1% to 207.1m pounds and 14m pounds of this was contributed by two newly-acquired companies trading in data management and communications products for computer networks. Moving away from memory products is a smart move for a company like Datrontech. With 12m pounds of stock on the balance sheet, it is still hurting from the worst price fall in computer memory prices seen in any year according to chief executive Steve King. Gross margins declined by 2% as a result, but the continued move into higher margin areas such as network services and information technology training helped to mitigate the problem. While the volume of the group’s memory sales continues to grow (38Gb sold in 1996), memory now accounts for only 40% of revenue, down from around 64% last year. With arrivals and departures at board level and a planned move to bigger offices in Basingstoke, Datrontech is evolving to exploit its new markets. Investors in the City responded enthusiastically to the change of direction with shares up ninepence to 235.5 pence. The board is recommending a final dividend of 4.2 pence, bringing the total for the year to 6.3p, up 62% on last year.
