Martyn Ratcliffe, who made his name as a senior manager at Dell Computer Corp believes that struggling UK storage company Microgen Holdings has a big future. And to prove it he has invested 3.5m pounds of his own money to acquire 10% of the company’s equity – and a seat on the board. At the end of this month, he takes over as executive chairman – but a glance at Microgen’s half yearÆs figures will show Ratcliffe that it will take more than a quick fix to solve Microgen’s problems. It’s going to be a long, hard grind. Microgen is typical of those companies who delay moving to new technology – and now face a race against time to push a new product onto the market while faced with declining revenues from its traditional line. The company’s background was in computer output to microfilm – an archaic process now shunned by forward-looking companies. The future lies in its Axess internet based information management system where data is stored on RAID drives. But the cost of developing Axess is running ahead of revenues – a big factor behind a 94% slump in MicrogenÆs half year income to 154,000 pounds. The whole future of the group depends on Axess, and chairman Douglas Lee reports a growing number of live accounts and a significant list of prospective customers. But Microgen has other problems. It was clobbered with a huge tax charge that could perhaps have been avoided with better planning and a new finance director has been brought in from Price Waterhouse. In addition, integrating their latest acquisition has proved a more costly and lengthy process than expected. Microgen generates half its revenues in Europe where, having ditched its loss-making Finish subsidiary, it was able to increase revenues by 3% and income by 21%. The market was unimpressed by the figures and the shares slid 15 percent to 110 pence.
