Rodime Plc, the Glenrothes, Fife-based Winchester disk drive manufacturer, and Japan Victor Co, JVC, have terminated their partnership programme to develop one-inch-high 3.5 120Mb Winchesters for the laptop and entry-level personal computer market because the two companies could not agree on product pricing and payment terms. Rodime and JVC have agreed to co-operate in transferring product manufacturing from JVC to an alternative manufacturer. And, beside a seemingly improved set of financial figures for 1990, Rodime has turned in disappointing results for the first quarter to December 31. For the 12 months to September 30, the company turned in net losses down to $12.5m, from $41m in 1989, on turnover that fell 3% to $93m. In the fourth quarter, net losses amounted to $1.2m, down from $8.3m, on sales that increased by 27% to $23m – an improvement which the company attributes to sales of higher capacity 100Mb and 200Mb disk drives to OEM customers – these accounted for 70% of the company’s disk drive shipments in 1990 – and the negative effect of production delays on turnover in 1989, caused by component shortages. Trading losses for the fourth quarter however, says the board, remained flat at $7m, as the higher margin sales were offset by year-end adjustment for the provision against the company’s investment in Profit Technology Inc (CI No 1,375), against the discontinued 5.25 product line, and for bad debts. Also included in the results is the undisclosed patent settlement from IBM (CI No 1,547) which has been partly offset by interest expense and the $5.5m restructuring provision for the discontinuance of new product manufacturing at the Glenrothes facility in January (CI No 1,572). Says the board, turnover for the full year, excluding 1990 and 1989 revenues from the retail products business which was sold last May, actually increased by 25%. In the first quarter of 1991, the increase in revenues slowed down dramatically – sales were up only 1.3% on the previous year at $22.4m. And net losses increased to $5.8m, from $4m, following product cost overruns and competitive pressures. Says the board, the full effects of further cost control programmes across the group and the consolidation of the new product manufacturing which has been moved to Singapore were not realised in the first quarter. As a result of the continued losses in the first quarter and subsequently, combined with the redemption of $6m minority preferred shares, Rodime’s net worth position as shown in the 1990 balance sheet has been wiped out, and the company has sought to extend its bank borrowings and is pursuing manufacturing joint venture partners in the Far East. No further details were disclosed.
