Turnover up UKP5.5m at UKP32.1m, and profit down to UKP1.27m from UKP1.74m, are disappointing year end results according to David Burnett, chairman of Microvitec Plc. The year started well for the Bradford-based terminals manufacturer with half year profits of UKP1.125m. But as the company forecast in its interim report (CI No 1,300), sales in the second half fell by UKP4.23m. Microvitec acknowledges that the reduced sales level was almost entirely due to lower sales with British Telecom and Reuters, both major OEM customers. As regards Microvitec’s products, monitors now constitute 50% of turnover, down from 74% last year. Terminals have doubled to 40%, with interactive video and graphics activities contributing 3% and 4% respectively. Of overseas sales, Germany constitutes 18%, against 9% last year. France, where Microvitec has a 33% stake in distributor Infoco SA, is down to 17% from 39%, and Microvitec attributes this to the ending of a lucrative contract with the French railways. Microvitec Deutschland GmbH, which was established in July 1989 to overcome distribution problems, made a loss of UKP84,000, but is expected to be profitable in 1990. Microvitec Inc made a profit of UKP88,000, well down from last year’s figure of UKP243,000. However, the parent company expects that figure to improve towards the end of next year when a new agreement with Electrohome Ltd of Kitchener, Canada begins to bear fruit. The two companies will co-operate in the design, development, manufacture, and distribution of colour and monochrome monitors. The 81-year-old Canadian company is to supply the monochrome units and handle all monitor sales in North and South America, while European marketing and distribution will be done by Microvitec. Electrohome’s recent financial performance was less than sparkling, with a $5.3m loss in 1987. Nonetheless, Microvitec believes that recent divestitures and an increasing focus on communications and broadcasting make Electrohome an attractive long term partner. Microvitec expects to report a loss in the first half of 1990, and says that it is too early to forecast second half figures. However, it believes that the combination of collaborating with Electrohome and a range of new products should have a marked effect in the final quarter – if it is able to carry on on its own: it acknowledges it is vulnerable to a bid.
