MARKETS
Psion posts small profit as revenues fall
04-03-2003
by John Cradden
Mobile computing company Psion made a small operating profit in 2002 despite a significant drop in revenues over the past year.
Posting results for the 12 months to the end of December 2002, the company made a small operating profit of STG3.5 million before exceptional items and goodwill amortisation, compared with an operating loss of STG5.5 million in 2001.
The UK firm, which recently pulled out of PDA manufacturing, reported a total turnover of STG137.9 million, down from STG188.1 million a year earlier.
In addition, exceptional items of STG8.1 million, primarily related to the closure of discontinued operations and write-downs in trade investments, led to losses on ordinary activities before interest of STG30.8 million, compared with a loss of STG150.4 million in 2001.
In its main business, Psion Teklogix, the company said it still faces a difficult market. "We shall maintain a policy of tight control and cautious development until corporate investment in information technology begins to expand again," said Psion chairman David Potter. "The prospect for the current year is for a modestly improving performance."
However, he said Psion Teklogix had performed satisfactorily under the circumstances and that "progress has been made in the development of a new business providing middleware software connecting the Internet to the new generation of smartphones."
With regard to Symbian, the wireless software company in which Psion is the main investor, Potter said it had made excellent progress in the smartphone market and that the company expected it to experience good growth in 2003.
Last month, Psion revealed that Samsung had bought into the Symbian consortium, a group of companies that has developed and is selling a handheld operating system that rivals Pocket PC and market leader Palm OS. Psion said Samsung had paid STG17.5 million to acquire a 5 percent stake in Symbian. Samsung had previously licensed the Symbian OS.
Releasing its results, Psion also stated that a reorganisation took place in January 2003 that resulted in a centralisation of its development activity in Toronto. It also said that its sales force has been reorganised, a restructuring that will result in a charge of STG1.7 million in 2003.
Speaking to ElectricNews.net, Psion group chief executive Ian McElroy, who is to retire in July, confirmed that a small development site in Oxford would close, resulting in some job losses, but many of the existing staff there would transfer to other operations in the UK or in Toronto. The US operation will also see a "change in skill sets and a change in numbers," McElroy said, with a number of new senior appointments.
Although Psion's results were in line with both management and analyst expectations, one mobile industry analyst was dismissive of the company's future, saying that without the PDA division, Psion could not be an industry leader. "They lost the ball years ago," said Simon Buckingham of Mobile Streams. "There's nothing going on."
In response, McElroy said that anyone who understood the company would know that this was not accurate. He said that a number of future developments within Psion were due to be announced shortly and that the volume of Symbian shipments is growing rapidly in line with the growth in the overall market for smartphone operating systems.
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