ilion issues profits warning – again
Could French connection save ailing distributor?
Troubled networking distributor Ilion has posted yet another profits warning -- its third in a year. In a statement issued this afternoon, the company announced that its pre-tax profit would be "materially below expectations" for the current year ending 31 December 1998. Ilion's problems have been consistently blamed on slow sales and low profitability in the UK organisation. A year ago the company warned that profits for the year would be down by around £2 million from the £8 million anticipated initially. And as recently as September, the company said performance was impaired by slower growth in the UK than was expected and by losses in some Continental subsidiaries. News of the warning sent the Surrey-based company's share price sliding by more than 15 per cent to 61.5p from a high today of 83.5p. The shares rallied marginally at the end of the day closing up 1p at 62.5p, a drop of nearly 14 per cent. Despite the bad news, Ilion's chairman and chief executive, Wayne Channon, remained optimistic and said: "I believe that the actions which we have taken in the UK to reduce our cost base and to strengthen our management team will be reflected in a more satisfactory performance in 1999." He confirmed that the sale of ilion's operation in Germany remains on course, and that France and the other Continental countries in the group "continued to perform well". He also wished to dampen press speculation that about a possible takeover, and confirmed that while the company had received a number of approaches from buyers, it was not currently in talks with any of them. Unfortunately, when The Register tried to speak with Mr Channon we were told that he was "out of the country". An ilion spokesperson refused to confirm his whereabouts -- or, indeed, any suggestion that he may be on business in France, perhaps negotiating an MBO of the French subsidiary as one senior source close to the company suggested. ®