Kalamazoo on slow road to recovery

Kalamazoo Computer Group has acknowledged it still has a lot to do to return to profitability, despite last year's extensive restructuring process involving staff redundancies and the sale of the company's conference facility.

The software and services company, which specialises in the retail automotive and manufacturing and distribution sectors, recorded a pre-tax loss of £2.2 million for the year ended 31 March, compared with £2.3 million in 1998.

Revenue was stagnant at £65.9 million, putting an end to the slide from 1997, when turnover peaked at £77.8 million. Kalamazoo's 1999 figures saw a 10 per cent growth in turnover from continuing operations.

Andy Peart, head of marketing at Kalamazoo, conceded the company was forced to restructure to improve its financial status. As part of the overhaul, Kalamazoo lost 130 staff at its Birmingham office in March, then sold its residential conference facility, The Beeches, in June for £2.4 million.

Peart said: 'Our internal infrastructure was not lending itself to the kind of performance we were looking for, but pressures in the retail automotive market and investments in product development also affected our results over the past couple of years. In the UK, we have focused our underlying processes, adopting best-in-class development, sales and support practices and bringing in people with a wide range of skills.'

He added: 'We are moving in the right direction.'

Peart said Kalamazoo will mirror changes in the UK subsidiary across its European operations to achieve its objective of returning to profitability within 12 months.

The changes are part of a three-year internal strategy designed to migrate the company from a product-based business to consulting organisation.

But Peart warned the corporate revamp would not necessarily result in a big increase in annual revenue: 'We are looking for significant growth in the future but profitability will be key, not turnover.'