Network distributor Azlan is showing signs of recovery, but is attempting to reassure suffering shareholders that an overdue Internet business launch will give it a boost.
Azlan's shares rose 2p to 46.5p yesterday after figures indicated the distributor was recovering financially.
The group, still under investigation by the Serious Fraud Office after a #30 million 'black hole' was found in its accounts, showed turnover up 9 per cent to #154 million.
Operating losses went down to #354,000 for the six months to 4 October, against a loss of #6.4 million the same period the previous year.
Losses per share were cut from 14.2p to just 0.3p, but no dividend will be paid to shareholders for the year ending 3 April 1999.
However, yesterday Azlan claimed long-suffering shareholders would benefit from a #3 million investment in an Internet business.
The company, which distributes networking products for Cisco Systems and IBM, will offer a comprehensive service over the Internet.
George O'Connor, research analyst at Granville, countered that the move itself would not boost share prices. He said: "It's now critical that distributors get into the Internet arena to follow their competitors."
Connor said that the problem also lay in the long-term pessimism from the City towards distribution in general. He added: "There is a lot of uncertainty in this sector."
Clive Longbottom, strategy analyst at CSL, agreed, but said the Azlan results were better than expected.
The six-month operating losses included an exceptional charge of #560,000 relating to a company restructure, resulting in redundancy and severance costs.
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