Plasmon Plc, the UK-based data storage company, is finally making money after re-positioning itself as a supplier of removable products for the mid to upper end of the market. In the year through March 31, the company produced a net profit of 111,000 pounds ($176,000) against an 8.1m-pound ($12.9m) loss in the previous year on revenue up 49% at 49.9m pounds ($79.8m).
The shares rose 3% to 115 pence on Friday amid optimism that Plasmon’s progress will accelerate in the coming year. The figures only include three months of operations from the acquisition in January of the high-end storage business of Philips Electronics NV (CI No 3,555), which had revenue of 25m pounds ($40m) last year. Even without this $26.4m purchase, revenue showed a 32% rise.
Chairman Barrie Morgans expects the rapid expansion of the data storage market to continue in the current year, helped by an expansion in e-commerce. While Plasmon may be a relatively small player in the storage market, it now has a broad range of products and manufacturing bases in the UK and US.
In the 5.25-inch disk market, Plasmon is a fair way behind Hewlett-Packard as number two supplier, although it has the 12-inch market to itself, a lucrative niche sector catering for high-spending users such as banks. Plasmon has a range of automated tape library products based on IBM’s fast-access MagStar technology and has just launched its own range of half-inch tape storage which is backwards compatible with older traditional tape formats.
Plasmon’s renaissance is remarkable in that it was only two years ago that the company started out by being badly burned when rapidly falling prices pushed it out of production of recordable Compact Disks (CD-R). This at least proved an expensive lesson to avoid the desktop arena and Plasmon’s new focus on the upper end of the market may produce good returns this year.
