1997 is the year that Division Group Plc says it will be back in profit, and figures for the year to October 31 have brought lower losses for the company. The Bristol, UK-based virtual reality hardware, software and systems company reported net and pre-tax losses of 1.7m British pounds against losses of 3.9m pounds last time and revenue was up 1.4% at 4.9m pounds. The company has changed its business orienatation over the past year, discontinuing sales of its own hardware, while remaining a reseller for Hewlett-Packard Co and Silicon Graphics Inc systems, though work in this area is expected to decline over time. Division has shifted its emphasis to the development and sales of software products and services, with its gross margain already showing signs of recovery and a cash reserve of 4.5m pounds. Division has been talking about the Virtual Prototype for some time, and last year it changed to the Virtual Product, a computer model that shows what real products look like in three dimensions, and exactly how they work. Attention is being focused on the engineering sector with Division seeing it as an early virtual reality market which it can target its new software, with manufacturers recognizing the need for more realistic simulations of their products. The company has experienced disastrous financial results in recent years partly due to the non- performance of its partnership agreement with Hewlett-Packard (CI No 2466) under which Division became a Hewlett-Packard reseller. Selling products made by Silicon Graphics as well, it saw hardware sales plummet 50% in 1995, although in October of the same year Division became a Premier Partner with the company. Division now believes that it is in a much stronger financial position and will place emphasis on a move towards profitability in the coming year, with tighter controls on overheads.
