Kode International Plc, the Swindon, Wiltshire-based computer maintenance and printed circuit manufacture group, has spent the first half of 1991 restructuring. Its 68% drop in pre-tax profits to UKP126,000 is testimony to the ever-continuing recession in the UK – before exceptional costs, made up of redundancy and compensation payments, profits were down 47% at UKP206,000, on sales down 11% at UKP7.5m. To date, Kode has shed 45 staff – split equally between the services and circuit board Emanufacturing divisions. Kode Computers’ computer services arm is currently following up new leads through new partnerships with various manufacturers. Kode’s chief executive, Stephen Day, says the company is looking to expand its computer maintenance arm by acquisition in the near future. Day would like to see the Digital Equipment Corp side of the business grow in particular, but the chief executive intends to remain open-minded until he finds a suitable proposition – he doesn’t want to do business with a company that is swamped with financial burdens. At the moment, Kode is in talks with a company that may fit with its printed circuit board business, Kam Circuits Ltd. This side of the business now accounts for 65% of Kode’s revenues and, although Day isn’t particularly concerned that the two core activities should be split 50-50, he does feel that a lot of effort has been put into restructuring the computer maintenance arm, which he now wants to see put to good use. The expansion is not necessarily intended to take the company abroad – Kode Computers is already moving into Germany; more it is the addressing of technology sectors that Kode wishes to broaden. Kode’s printed circuit board customers include GEC Plessey Telecommunications Ltd, Marconi, AT&T Co and Siemens. Kode expanded this side of the business last year, with the acquisition of Doplar Designs Ltd, which enabled the company to grow in the medium volume circuit board market. The 18-month-old Kam Printronics Circuits printed circuit board joint venture with Allied Group in the Far East, which is reported to have made good progress with sales in the first half up substantially on this time last year, provided the vehicle for Kode to enter the high-volume circuit board market. Kode’s investment in this venture has been minimal – in return for three cheap manufacturing plants in mainland China, the company just takes care of marketing the boards in the UK and US. With strong balance sheet and no bank borrowings, Kode is confident it can hold out until the UK economy begins to pick up. Day expects this to start happening at the beginning of next year but, while he expects to see better results in the second half, he reckons it will not be until the end of next year that Kode will see the benefit from any economic recovery.
