Microvitec Plc, the Bradford, West Yorkshire-based computer peripherals manufacturer that snapped up the ailing Wigan, Lancashire-based electronics group Logitek Plc in a hostile takeover in May (CI No 1,671), is still facing problems of its own and has failed to return to profitability at the interim stage. The acquisition of Logitek did not help matters, contributing UKP260,000 to Microvitec’s pre-tax losses of UKP2.2m, which were up from UKP2.1m last time. Sales grew by 11% to UKP12.5m, after an addition of UKP2.5m from its new recruit. Since bringing Logitek on board, Microvitec has cut 50 of the Lancashire company’s 350 employees – mainly positions in administration and has moved the company out of its head office, relocating all the Logitek activities into one office in Wigan, though the Slough office is still in use. And Microvitec has now been restructured into five operating divisions – Monitors and Display Terminals; Communications and Information Technology Software; Software Applications; LTSS; and Distribution. The Monitors and Display Terminals activity is currently in advanced negotiations that are expected to result in a strategic alliance with a North American monitor company. The Communications and Information Technology Division consists of Vitec Communications in Chester and Silicom Manufacturing Technology Inc in Canada. The Software Applications business focuses on vertical markets and consists of Microdrive Ltd, servicing the publishing sector; Logitek’s CSM, aimed at the accounting and tax sector; and MV Multimedia, targeted at training and point-of-sale systems. The LTSS Division, also from Logitek, is a service, maintenance and technical centre. And the Distribution Division, which is now Microvitec’s largest contributing business, deals in Wyse and ICL personal computers and 3Com networks. Microvitec is currently trying to improve working capital management, by controlling the inventory and by other such measures. No more redundancies are planned though, and finance director Tony Samson says the company is at the moment recruiting at its Bradford factory. More losses are inevitable at the year end, but Samson says the current cost-cutting programme is targetted to ensure that the group trades profitability in all sections of its business next year. Meanwhile, the state of Microvitec’s balance sheet is a close-guarded secret.
