Info'Products has indicated the full extent of its financial problemsr outsources its services. after it emerged that the reseller has suffered from accounting discrepancies over the past two years, resulting in an accumulated loss of at least #10 million.
Observers claimed Info'Products UK made losses of between #3 million and #3.5 million for the year ended 31 December 1997, with an accumulated loss of at least #10 million for 1996 and 1997.
Paul Morgan, finance director at the Chelmsford-based reseller, refused to deny the loss when the 1997 figures were put to him. 'The management team, at that time, hadn't controlled several areas of the business, such as inventories.' He added that last year's figures were 'distorted by one-off cost elements like acquisition costs'.
Regarding the larger losses, Morgan refused to comment on exact figures, but admitted the company had made 'substantial' accumulated losses.
Morgan added that KNP BT, the parent company, only became aware of the accumulated losses at the end of 1997. Morgan said: 'As soon as it found out, KNP BT acted on the information, resulting in January's management changes.'
In a bid to cut overheads, Info'Products will outsource three areas of its customer services division - field maintenance, warranty and engineering workshops, in a deal worth between #5 million and #10 million. Hewlett Packard and Digital are understood to be in the running for the contract.
Bill Colman, Info'Products' customer service director, confirmed that 'four national service organisations' were being considered, and a decision would be made early next month. The scheme will be implemented on 1 July.
Richard Kenny, services director of Abtex, said: 'While the rest of the UK market is consolidating its service and supply divisions, Info'Products seems to be going the other way in the UK and Europe.'
Howard Dickel, Info'Products director of business development, said: 'We aren't reducing services but are looking at smarter ways of deploying them. We'll manage services through our call centre.'
See feature, page 27.
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