Bradford monitors and terminals manufacturer Microvitec Plc, rocked the market with confirmation that second half sales are going to be lower than expected, and sent the shares tumbling. The company says that a figure of UKP14m seems likely, compared with UKP18m in the first half. However, the company’s first half results were inflated by a number of handsome OEM contracts, including one from British Telecom, worth UKP5.5m. Paul Dhesi, Microvitec’s managing director, says that the first half of the year saw exceptionally high demand, but the summer months reflected a downturn which is set to continue for the remainder of the year. The 700-strong company has cut staffing levels by 60 since the end of August, and Dhesi acknowledges that there may have to be further reductions in order to reduce costs and overheads. To date, it has been weekly or monthly staff that have suffered from the necessary rationalisation. Microvitec expects to be writing OEM business for its new Series 9 VGA monitor within the next six months, and is currently involved in discussions, although no contracts are imminent. It established a West German subsidiary in July of this year, and despite initial set-up costs, Dhesi says that he is pleased with the returns so far. A US operation was established five years ago, and its performance is also said to be satisfactory. Microvitec expects the first half of next year to be difficult, but believes that a combination of cost-cutting measures and new business from the Series 9 monitor will have a visible effect on profits in the second half of 1990.
