Former Gandalf Technology Ltd chief executive James Bailey, whose vehicle is now Bradford, UK displays manufacturer Microvitec Plc, is not having things all his own way, and he has reluctantly decided that his charge is going to have to slim. Microvitec is selling off its non-core businesses in an attempt to reduce its borrowings and create some new products. Shares in the company fell 2.5 pence on the announcement of poor year-end results but the board is talking up the prospects for 1997. The company has made a pre-tax profit for the year to December 1996 of just 461,000 pounds, down from 3.4m pounds last year. Revenue has increased 20.3% to 60.2m pounds with 64% of this still being generated by the company’s core business of displays – so much for the plan to reorient the company towards data communications equipment so that this became its single biggest business. Gearing has jumped to a frightening 84% but the company is in the final stages of disposing of its loss-making accounting software division CSM to Pegasus Group Plc. On completion, the sale will generate around 4m pounds of cash upfront together with an 8% stake in Pegasus. About 2m pounds of this will be applied to reducing gearing to the 40% level. The rest will be plowed back into the range of new products the company has in development, including wireless data transmission, high speed digital data services for the cable television industry, and video conferencing. Group technology director Mike Parker was hard pressed to say which products will become established in 1997 but he is confident that there are enough irons in the fire to produce at least one high revenue product. The company proposes to pay an unchanged final dividend of 0.45 pence, bringing the total for the year to 0.88p.
