Datrontech to shrink further in wake of poor results
FD quits but Mulford not ready to give up the ghost just yet
Datrontech Group released "very disappointing" half-year results yesterday, but chief executive Mark Mulford denied he was about to resign his position. The distributor that further cuts were inevitable as it posted pre-tax losses, before exceptional items, of £700,000 for the six months ended 5 July 1999. Total losses on ordinary activities before tax were put at £3.4 million compared to last year's profit of £2.6 million. Sales slid to £113 million from £134 million. It also said it was shutting its Eastern European companies, with the expectation of PC Direct in Poland, following trading losses of £922,000 in the region. Datrontech said UK business had been mixed – Summit's trading was described as unsatisfactory, trading at a loss in the first few months of 1999. Staff cutbacks and a re-jig of the company cost around £1.7 million, which were included in the group's exceptional items. The group made a loss of £1.2 million when it sold PC recycling subsidiary RD Trading to Computacenter. But this included a write-back of goodwill of £2.6 million, the company said. Datrontech said it had decided on "a further reduction in the scale of the group's activities" but would not elaborate on the nature of this reduction. It added that its bankers agreed with the strategy and would continue their full support. There were a number of high level staff changes included in the announcements. The group's finance director, Philip Congdon, quit his post, but will stay on to hand over to his successor, David Holloway. And Mark Davison, who left Datrontech in January, has rejoined as general manager of Summit. Datrontech CEO Mark Mulford said there was still a long way to go with the company's reorganisation. "It's been a long, hard journey, with a bit longer to go yet. But we're on the right track," said Mulford. He added that he expected the process of restructuring the company to be finished next year. "Our core businesses – those in the UK – are still profitable. And we're not going to go out and buy any more companies, we'll make what we've got work," he said. He said he was pleased with the cash flow and performance of liquidity of the group. Responding to recent speculation that he was about to resign, Mulford said: "I'm not leaving. At least, not in any voluntary fashion, anyway." ®
Sponsored: Are DLP and DTP still an issue?