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November 22, 1995

KALAMAZOO LET DOWN BY PRINT DIVISION IN FIRST HALF

By CBR Staff Writer

Birmingham-based Kalamazoo Computer Group Plc had few surprises to report in its interim results, which closely mirrored its expectations for the coming year as laid out in June (CI No 2,689). The computer and print services company attributes a drop in profits, down 25.4% to ú1.4m for the six months to September 30 to poor performance in its print division. Here, Kalamazoo’s predictions are coming true, namely that it would see a decline in traditional forms printing business, and an increase in security printing, in which it sees its future. Security printing, printing identifiers on paper to prevent copying of sensitive documents such as car tax disks and insurance forms, has increased to 33% of the print division’s business, from 23% last year. It is expected to continue to increase as a proportion of sales. To emphasise the direction of the division, it has been re-named Kalamazoo Security Print Plc. Turnover for the division has increased by 5% to ú8.2m, but investment in new security print features, and increased paper prices have contributed to the trading loss, the company said. The division has also made redundancies, at a cost of ú266,000. The computer services division has fared better.

Acquisitions

Kalamazoo’s recent acquisitions, Wembrook Computer Services Ltd’s stock broker system (CI No 2,642), and WIS Computer Systems Ltd, now Kalamazoo Answer Ltd have performed well and added more than ú1m to turnover. Its Elite motor dealership system for large dealers is establishing itself well in the market and its small dealer system KDMS should see significant market penetration in the second half. The Autoscan used car valuation product has received a lot of interest, and a pilot will be run early next year. It acquired Autoscan’s owner, Autodata, which it says has opened up the Swedish and Dutch markets. Kalamazoo expects the security print division to return to profit this half as a result of redundancies and seasonal demand in the fourth quarter, and said the computer services’ order book remains strong. Overall results for the year will benefit from an improved second half, it says, but cautions that on-going investment will be needed to generate future growth. The interim is 1.10p per share, up from 1.00p last time.

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