Viglen profits remain linear at best

Move into services

Amstrad lovechild Viglen Technology will try and dig its way out of continually flat profits by re-focusing its efforts on networking and value-added software services. The company's aim is to move away from purely direct PC sales which took a massive hit last year as market share fell by 50 per cent. Viglen has just announced pre-tax profits of £4.4m on sales of £94.6m and warns that it expects profits to remain "linear" in the foreseeable future. Chairman Alan Sugar, who is no stranger to ringing the changes, has confirmed that the company will metamorphose into a networking and software services provider but not at the expense of its education market. Viglen has performed well in education with a 14 per cent increase on sales from the previous year and this includes both PC and software sales. The company's acquisition of Xenon Networks in February this year enabled the company to change tack and this is where Sugar sees future growth and profit margin. However, Sugar has also committed himself to increasing the workforce in the education division "as we are committed to growing out share of the schools market," he said. Viglen's share of the direct market has been halved while sales to corporates have also been hit and Sugar is looking to networking as a way of getting the company back in line. "It's something that Viglen had to do," said Adrian O'Connell, PC analyst at Dataquest. "Elonex and Tiny already offer this kind of service so there will be plenty of competition. It's unlikely to turn them into a success story but should help keep the wolf from the door."&reg: Click here for more stories

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