Viglen Technology Plc has produced another modest performance as it moves away from the cut-throat world of direct PC sales into the more high-margin and rapidly-expanding business of systems integration in the public sector, particularly the education market. Net profit for the year through June 30 was down 4.8% at 2.6m ($4.1m) on revenue that rose just 3.3% to 90.1m pounds ($145m). Ironically, profits fell because of 346,000 pound ($557,060) costs related to a bid made for the company by its chairman Alan Sugar in a ploy to increase its share price. His strategy succeeded as the price rose from 14 pence to 62 pence currently, and Sugar increased his holding from 33.7% to 41.7%.
Viglen still boasts that it is the largest UK computer manufacturer though the Middlesex, UK-based company is now focused on networking and the schools market. Education sales rose 12.2% to 32.3m pounds ($52m) though Viglen expects the main benefits of its investment in this sector to come next year.
Despite a 17% reduction in selling prices, sales to the public sector grew 11.6% to 22.1m pounds ($35.5m). Falling prices were responsible for a 5.9% decline in corporate sales to 23.4m pounds ($37.6m) though Viglen has hopes of a recovery next year. Cash sales fell 21.8% to 10.4m pounds ($16.7m) though this has been offset by a fall in overheads and advertising costs. Sugar expects the workforce to increase this year to meet the demands of increasing sales into the schools market.
