MBS Plc is restructuring its operations in an effort to protect its position in the microcomputer market following the dropping of its personal computer distribution business earlier this year (CI No 965). The news comes in the wake of disappointing mid term figures for the Windsor, Berkshire-based company which saw pre-tax profit fall to UKP215,000, down from UKP1.4m last time (see Company Results). Measures include the closure of three major and six minor sites, including the company’s head-office at Eton and the administration offices at Slough which will be relocated into existing premises in Warrington and Ascot, and the possible divestment of non-core activities. Overhead savings in excess of UKP5m are expected over the next 12 months, but there will also be 85 jobs lost and an expected extraordinary charge of between UKP5m and UKP6m in the second half. MBS says that the market has been flooded with IBM products shipped at large discounts, leading to erosion of margins at end-user level. This, says the company, contributed significantly to the fall in profits, particularly in the second quarter when trade conditions deteriorated more quickly than the board anticipated. On the plus side the company had some encouraging results in value added services. MBS Engineering saw turnover rise 29% in the first half of 1988; Education & Training almost doubled; MBS Communications grew by 59% and acquired Integrated Broadband Services Ltd last July; the Microtex business, remarketing Altos Computer Unix systems, enjoyed 18% growth; and the new DEC distribution business began trading in the last week of July.
