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ilion in talks to flog German-speaking operations

They lose too much money

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Networking distributor ilion has released its results for the first half of 1998, showing that while turnover increased by a healthy 42 per cent, profit crashed to almost a quarter of last year's figure. For the period ending 30 June, turnover for ilion stood at £125.6 million, an increase of 42 per cent on £88.4 million for the same period in 1997. At the same time, pre-tax profit fell from £4.0 million for the first six months of 1997 to only £1.2 million for the first half of this year. In the face of what the company admitted were worse than expected results, ilion has decided to pull out of Austria, Germany and Switzerland - three of its loss making territories. The German and Swiss operations lost more than £1 million between them in the six months up to 30 June 1998. At the end of the six month period debts totalled £9.3 million, compared with £4.9 million for the same period last year. A dividend of 1p per ordinary share will be paid out on 27 November - last year's dividend stood at 2p per ordinary share. Wayne Channon, ilion chairman, blamed a slow down in the UK market for the worse than hoped for results. Investment aimed at solving year 2000 problems has partially diverted spending from the client-sever market," he said. He also said that the second half of the year was expected to bring a general upturn in sales which would boost profitability. Channon said the sales of the poorly performing foreign businesses were "at an advanced stage" and would reduce ilion net assets by no more than £1.3 million. French subsidiary Alphamega has also been disposed of, in this instance via a management buy-out led by M. Simon Tournadre for £490,000. As Alphamega sells direct to end-users - in contradiction to the clean channel policy advocated by ilion - the parent company said it was pleased to be able to offload it in an amicable fashion. ®

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