Software house and management consultancy Kewill Systems Plc has issued a profit warning, prompted by advisors Kleinwort Benson. The Walton-on-Thames, Surrey-based company was on an even keel with its interim results for the six months to September 30 (CI No 1,811), but faces difficulties with the reorganisation of its May acquisition of Stuttgart, Germany-based production control and manufacturing control systems software house Weigang MCS GmbH (CI No 1,671), together with the reorganisation of the German computer-aided design operations. Chairman Kevin Overstall says that UKP750,000 was put aside at the time, as a ‘fair value judgement’ to cover the reorganisation of Weigang. The money is insufficient to cover Weigang’s losses in the current financial year, he says, adding that it will take around six months to put things in line. Overstall confirms that Weigang has a new managing director in Frans Angerer. The last one ‘left’ before Christmas after having hired 20 new personnel, unbeknown to Overstall who was overseeing a reduction in the workforce from 120 to 80. He says there will now be further cuts in the workforce. In response to the falling sales order book, Overstall says that sales techniques, which have been ‘neglected in the past few months’, will be regenerated under Angerer. These include proper support for salesmen and sales lead generation programmes. In association with Hewlett-Packard Co, Weigang is one of its largest value-added resellers with 400 Hewlett-Packard sites, Weigang will be shaping up its approach to sales. Overstall predicts that the reorganisation of the German CAD operations, with the amalgamation of five 10-man companies into one company in HAN Dataport, which produce the CAD400 design product will also take about six months. Overstall is optimistic that the benefits of these actions will follow in the next financial year but that for the year to March 31 the difficulties in Germany will have a significant adverse affect on the group’s profit outlook. All of which was bad for a 93 pence slump in the share price, which tumbled to 225 pence on the news.
