False sales figures hit Kalamazoo?s forecast

Group sends packing two business solutions division managers who failed to admit to mistakes

Two senior managers at Kalamazoo Group were forced to leave the company last week following the discovery that they had falsified sales figures.

Kalamazoo chairman Bob Jordan said the individuals held the positions of head of the business solutions division and senior financial manager, but he refused to name them. A Kalamazoo representative confirmed that the pair had both worked in the Tetra division. Operating profit at the division was about #1.4 million on sales of #6 million last year.

It was understood that the individuals did not profit from the errors ? they got their figures wrong and compounded the situation by not admitting the mistake.

Their departure led Kalamazoo to issue a profit warning saying that the group?s results for the year ended 31 March would not meet analysts? expectations of about #7 million.

The company said its pre-tax profit would now be similar to last year?s figure of #5.88 million on sales of #66.7 million. Kalamazoo shares plunged 22p to 77.5p after the announcement.

Andy Peart, marketing manager at Kalamazoo Group, said: ?No cash left the company, it was purely a reporting discrepancy. It was not for personal interest. We believe the motive was simply not to let down colleagues.? The company is now being internally audited by accountant Deloitte & Touche.

Kalamazoo has reported strong growth since its acquisition of Datapoint last year. ?After the breaches had been taken into account it is still a profitable business,? said Peart.

Eighteen months ago, Kalamazoo was forced to issue a profit warning after problems in the company?s print division.

This announcement came after Kalamazoo had lost its managing director following boardroom conflicts.