Past problems at Azlan continue to reverberate as an investment company admitted to selling off its holding when it was left in the dark over its finances.
In its interim results for the period ended 31 March, Glasgow-based Murray Enterprises, part of Murray Johnstone PEP portfolio investments, admitted it had sold off its holdings in Azlan and its competitor Ilion.
John Johnstone, investment manager at Murray Enterprises, said: 'We didn't know what was going on, but one of the problems at Azlan was a lack of financial control. The distributor was running it for cash but had run out of funds. The stock turnover which built up between 1996 and 1997 became a cash crisis. It was living hand-to-mouth.'
According to Johnstone, Azlan was the cause of Ilion's poor results.
'It was dragged down - it is about how the company was doing in terms of expectations,' he said.
'Although we sold the holding we had with Ilion, it is a well-run business in financial control. It will come back.'
Murray Enterprises had suffered in the final three months of 1997, which Johnstone said 'were appalling'. But he said Q1 lifted the results to the 13.6 per cent benchmark in the FTSE SmallCap Index, with the gains in investments totalling #2.3 million.
Johnstone said Murray had begun leaning towards small IT companies, despite selling off holdings in Azlan and Ilion.
'There is still a growth element in distribution and the only way to forge it is economies of scale. Small companies, can differentiate themselves while growing in an innovative area like IT,' he said.
Azlan and Ilion were not available for comment.
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