Microgen Holdings Plc felt the effects of a bungled European takeover in its preliminary results for the year to October 31. The Computer Output on Microfiche specialist, which saw turnover rise 8.2% to UKP53.4m, reported net profits down 23.2% at UKP4.2m. This follows heated competition in the COM market and a UKP500,000 operating loss in its Danish arm after too much attention was diverted to an acquisition, the computer output business of JDC. The firm has dismissed the Danish management responsible and has laid of some other Danish staff. It is also investing in the automation of its COM business to increase volume. Overseas expansion has been complemented by the investment of resources into its printing and invoice management businesses. The UK, which saw a 37% downturn in profit as competition drove down prices, has been turning largely to facilities management, which the firm says will be more profitable when it has fully automated its Computer-Output Microfilm service to reduce costs. The latest and largest facilities contract is with British Telecommunications Plc, a long-time customer of Microgen. Although financial terms are not disclosed, Microgen will be putting out 4.7m fiche per year for British Telecom, a large increase on its former 950,000 annual output for the phone company.
J P Morgan
Other facilities management contracts scooped up by Microgen include the Trustee Savings Bank, J P Morgan, Volvo AB and the City of Oslo. Douglas Lee, chairman of Microgen, told Computergram that the firm has spent UKP5m on equipment to improve data communications facilities, and is persuading customers to become automated too to speed things up. Ironic, then, that its latest and greatest outsourcing client, which specialises in telecommunications, still couriers round its COM data in tape format. Meanwhile Microgen’s UK-based two year-old Invoice Management Service has upped its turnover by 90% and is expected to more than double revenue this year. The firm is renaming it Critical Document Express, with a proportion of the technical investment for the group to be placed here. The Demand Publishing subsidiary of Microgen has made an expected operating loss of UKP500,000 since its UKP1m launch just over a year ago, and is expected to contribute a modest profit this year. In Norway, recently added subsidiary Microgen Capella has netted several large contracts and operating profits were UKP151,000 on revenues of UKP1.5m. The company is offering computer printing and COM operations. Denmark is expected to recover from its difficulties enough to scrape in on a low profit by the end of this year. Paradoxically considering the state of the German and UK economies, Microgen’s German outfit has boosted operating profits by 48%. Normally we’d expect the inverse to be true, but Lee explains that sterling devaluation helped the Germans, while the UK had to contend with the Demand Printing start-up costs. The group, which still has UKP2.9m in the bank after a hectic period, has proposed an unchanged dividend of 7.25 pence.
