Corporate reseller Morse has claimed the integration of SAP reseller Diagonal is going "according to plan".
The VAR last week released trading results for its fiscal first quarter 2005 ended 30 September, which saw turnover increase by 26 per cent to £92m, compared with £73m in Q1 2004. However, this figure is down on previous quarters, with £107m reported in June and £96m in March.
Morse acquired Diagonal for £50m earlier this year. At the time analysts said the firm would have its work cut out "continuing Diagonal's recovery programme".
But Richard Lapthorne, chairman of Morse, said: "The integration of Diagonal is proceeding according to our 100-day plan. We have identified and implemented the actions to achieve the £1.5m cost savings we want."
Lapthorne said Diagonal's new business pipeline was "weak on acquisition" but Morse is encouraged by the number of new early-stage prospects the enlarged group is identifying.
Morse said its cash position, even after the acquisition of Diagonal, "remains strong", with a net balance of £38m.
"We are continuing to change the shape of the business in line with our strategy as a technology integrator. The current financial year has started in line with our expectations and we anticipate this year comparing favourably with 2004," the statement added.
Kate Hanaghan, research analyst at Ovum Holway, said it is "early days".
"It seems the firm is looking to focus on profitability in the future. Morse is now in a position where people will be looking to see what happens next with Diagonal. It has a lot to be getting on with, and it is not going to be looking for more acquisitions.
"It will be concentrating on sorting out Diagonal first and foremost," she said.
Separately, Morse is set to build and distribute Tarantella Secure Global Desktop Appliance (SGDA) for BladeCenter to customers in the UK, France, Germany and Spain.
SGDA comprises Tarantella Secure Global Desktop Enterprise Edition software and SuSE Enterprise Linux Server 9, pre-configured by Morse on an Intel-based IBM eServer BladeCenter HS20 and HS40.
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