Despite being encouraged by the initial results of its strategic review, loss-making chemicals venture Reflec's board has warned that 'the achievement of profitability and positive cashflow requires us to make more changes'. In a 'difficult and challenging' year to February, losses at the pre-tax line widened from £487,000 to £6.8m, although sales were lifted to £3.4m (£2.5m). Back in October, head of global reflective operations Peter Smith was appointed chief executive and, with the company losing money, a group review was undertaken. Since then, Reflec Hong Kong has been re-organised, while the loss-making Viewercom arm has been liquidated due to the slow take-up of its blue-screen product. Apparently, Reflec Evolution, which provides fine powder services to industry, is unlikely to generate a gross margin of more than 25%, so future investment will be minimised, or limited to joint ventures. Reflec USA has also underperformed, making a start-up loss of £661,000 on £1.1m sales. Nevertheless, the company maintains that North America represents a 'major growth opportunity'. Issued at 40p in 1997, the bombed out shares gave up another 0.13 of a penny to 1.38p in early play, against a 52-week high of 7.25p. Avoid.

Reflec	AIM	£0.89m	8.00p	0.00p
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