Action warns of £6 million loss

London-based Action Computer Supplies has warned investors to prepare for losses of £6 million for this financial year.

The computer reseller said sales had been slower than expected in the first half of the year, especially in April and May. Turnover for the year ending 30 August 2000 was expected to show "a small increase", resulting in operating losses of between £500,000 and £1 million before one-off costs, the company said.

Total losses are likely to be around £6 million when including costs "relating to the remodelling of the business, and continued investment in the Internet". Action said its planned re-organisation, part of a switch from mail order to online sales, "will result in a significant reduction in future overheads and may lead to the outsourcing of certain non-core activities".

For the year ended August 1999, Action saw pre-tax profits of £2.2 million on sales of £277. The previous year, profits topped £7 million on sales of £250 million.

The company is also to lose its group MD, who is quitting after ten years at the company. George Laplante will return to the US to "resume his personal and business interests", Action said. He will stay at the company until his replacement, who has yet to be named, takes over.

Action is now pinning its hopes on its online sales business - which currently brings in £66 million per year.

"Against a background of slower recovery in IT spending after Year 2000, we are enjoying powerful and continued growth in Web sales," said Action chairman Henry Lewis.

"We believe that the Internet is central to the future of supply chain businesses and we are investing to take full advantage of our leading position." ®