A lower cost base following the closure of its troublesome customised systems arm, and a decision to concentrate on mainstream products are cited by Acorn Computer Group Plc as the two main reasons for the company’s turnaround in fortunes. TheCambridge micromaker yesterday posted profits of UKP711,000 for the half year to June 30, compared with […]
A lower cost base following the closure of its troublesome customised systems arm, and a decision to concentrate on mainstream products are cited by Acorn Computer Group Plc as the two main reasons for the company’s turnaround in fortunes. TheCambridge micromaker yesterday posted profits of UKP711,000 for the half year to June 30, compared with a loss in the year to December 31 of UKP3.3m and a loss in the corresponding six months of UKP1.4m (see Company Results). Bank borrowings have fallen to UKP1.8m at the period end, from UKP2.8m at June 1987 and a high of UKP4.7m at the end of 1987. Staff numbers have fallen to 230 from 280 as a result of the closure last November, but the company joined Acorn as managing director in January of this year, said that the Archimedes 32-bit RISC microcomputer had penetrated existing markets, notably education where he said the BBC Micro Master Series still continues to sell in good numbers. According to management the two ranges accounted for 80% of turnover in the six months. Sales were split evenly between them – UKP8m each for the period – which means that because of the price difference fewer Archimedes units were shipped. However the company is still searching for a number of niche markets for its products outside of education. Harvey Coleman said the company will focus on the home-hobby, audio-visual, health and small business sectors in the next 12 months in an effort to broaden its customer base. The half year also saw Sanyo become a second source to VLSI Technology for the Acorn RISC microprocessor, with worldwide marketing rights. Mr Coleman said royalties from the licensing agreements were not large – a single figure percentage – however as there are no costs involved it may well prove a nice little earner. The microprocessor is also at the centre of a laser printer controller card which enables desk top micros drive a dumb laser printer engine and the first order for the product, worth UKP500,000, has come from Olivetti. Contracts with other companies are now being negotiated. Rumours that Olivetti plans to cut its 79% share in the company by way of a share issue to outsiders were denied by management. There is a standing agreement with Olivetti for extra funding when needed for capital projects, but management stressed there are no such plans at the moment. The company is instead gearing itself for the launch of a new Unix workstation range expected to be released in early 1989. The project was internally-funded; research and development accounted for 15% of turnover in the last period.
