Companies: TRC   

Despite an extensive reorganisation that involved shutting down three businesses, mobile data network outfit Transcomm moved £170,000 into the black at the interim stage. William Davidson reports.

In the six months to June, Transcomm (TRC) turned in pre-tax profits of £170,000, despite turnover dropping from £8.7 million to £7.2 million. At the same stage last year losses came in at a hefty £3.1 million.

The reorganisation, which led to the closure of the Mobile Products and the Mobile Solutions divisions, appears to have succeeded in reducing costs. Chairman Rod Matthews says Transcomm's annual costs have been trimmed from £18.6 million 18 months ago to £10.8 million. And once the network has been installed, these are largely fixed. Therefore any benefits from turnover growth should be evident at the bottom line.

The emphasis is now on securing increased sales. Matthews says more than 600 mobile units have been installed for 'white goods' delivery business General Domestic Appliances, while parcel delivery outfit City Link has added 1,500 units.

Transcomm's equipment allows companies to keep track of large numbers of staff that are on the move – for example, delivery staff or emergency workers. It owns the Mobitex network, a dedicated mobile data network that uses 'packet' technology to transmit data, which is more effective than competing technology because data can be split into separate packets, transmitted separately and reassembled at the receiving end.

The reorganisation has extended to the boardroom. Chief executive Andrew Fitton has been replaced by Andrew Carver, an experienced IT and telecoms manager. Fitton will stay on as non-executive director until the end of the year.

Transcomm shares picked up 0.5p to 14p in early trading (1p above their 52-week low), valuing the business at £14.3 million. The shares were issued at 17.5p in March 1999, and within a year had soared above 100p.