MR Data Management Group Plc warned a year ago that its software division, Memex, was a cause for concern (CI No 2,372) and following a review, it is now up for sale. MR Data issued a profits warning in June, indicating that profits were likely to be less than half than most analysts’ expectations, at around ú3.5m. In the event, even the company’s own pessimistic predictions were not sufficiently downbeat. The London-based data transcription and document image processing company reported pre-tax profits for the year to June 30 down 79% to ú1.3m, after ú2.8m in one-off costs, which was more than double the hit predicted. Turnover was virtually flat, up just 2% to ú41.4m. Somewhat worryingly for the company, the flat sales were blamed on the core microfiche business in the profits warning. This has been integrated into a single unit since June, along with the CD-ROM, scanning and microfilm businesses. Cash flow from operating activities was the same as last year at ú6.1m, and the tax paid was down 26% at ú2.6m. But the exceptional costs for redundancies, a write-down of assets and excess property rentals have taken their toll. Chairman since June, Colin Haylock said he was confident that a return to acceptable levels of profitability will be achieved by the restructuring. In the past year, MR Data has put around ú700,000 into product development at Memex, which has a text retrieval system, aimed predominantly at the police market. No price has been put on Memex, but Haylock said in his statement that he hopes the business will be sold within a few months. The one real success story was MR Data’s laser printing business, which the company is looking to expand. The final dividend of 1.5 pence makes a total for the year of 3.576 pence, down 35% on last year. MR Data’s shares did most of their retreating after the profits warning in June, as a result of which they were down tuppence at 62 pence yesterday.
