The year started with a feeling uncertainity over Compel's acquistion of Info'Products, which caused massive unrest among staff as Compel Group concentrated on securing its slot as the second largest corporate reseller in the UK.
January: Compel and its recent acquisition Info'Products UK gear up to be sued for unfair dismissal by approximately 60 former employees who were made redundant at the beginning of the year. Staff laid off when Compel agreed to buy Info'Products late last year present a joint claim against the two resellers to a solicitor, less than a month after Compel agreed to buy Info'Products and only days before the official takeover, 8 January. Co-ordinating the claim on behalf of redundant staff, George Fodor, ex-legal manager at Info'Products, maintains that the ex-employees are entitled to 90 days pay, instead of the 30 days offered, regardless of how long they had been at the company. The group also cites contravention of Transfer of Undertakings (Protection of Employment) regulations, regarding the transfer of Info'Products' staff contracts in the takeover. Mark Howling, Compel UK managing director, responds that Compel had sought professional legal advice prior to the takeover and believed the process was fair and lawful. Ex-employees set up a website to co-ordinate their campaign.
February: Compel sees pre-tax profit for the six months ended 31 December 1998, up 36 per cent to £4.97 million from £3.67 million in 1997, and revenue for the interim period of £121.6 million - an increase of 40 per cent on the previous year. Figures did not include charges related to Compel's acquisition of Info'Products. Neville Davis, chairman and chief executive of Compel, claims the growth was evenly spread across all areas of the reseller.
June: Compel sells off the Dublin based subsidiary of Info'Products, Info'Products Ireland (IPI), for IR£1.4 million to Decision Support Systems after being deemed to be a non core operation. Compel decides its strategy is based exclusively on major corporate users in the UK and it aims to meet the international needs of these customers through global alliance.
July: Stratford Employment Tribunal rules that Compel's legal battle with former Info'Products staff will not start until February 2000, more than one year after the dispute began. By now, more than half of the 150 people made redundant when Compel bought Info'Products are jointly suing Compel for unfair dismissal, up from a third originally.
August: Compel finally obtains Hewlett-Packard's Premier accreditation to sell Intel-based HP products, eight months after four key rivals received the honour in the vendor's first round of awards. Compel becomes the first UK reseller to carry HP's Premier accreditation for both Unix and Intel product lines.
September: Compel joins the long list of companies warning of a millennium related fourth quarter slowdown despite a healthy set of full year figures showing a 41 per cent jump in pre-tax profit to £12.7 million and a 40 per cent rise in turnover to £293.8 million. It had originally expected business to pick up in February 2000. In a statement accompanying the results, Davis also said Info'Products was being successfully integrated into the company.
Compel establishes Compelscope, a separate consultancy business, in an attempt to strengthen its reputation as a services provider. The unit will provide consultancy services and strategic implementation advice with 60 consultants, to be overseen by newly appointed managing director Julian Morgan, previously a director at EDS subsidiary AT Kearney.
Also, in a bid to reposition itself, the company renames its managed services division, Compel Plc, as Compelsource, and its systems integration services division, Hamilton Systems, as Compelsolve. Hamilton Rentals continues to trade under its existing name, but Davis denies that it escapes re-branding because it is up for sale.
October: Compel is appointed by Compaq as a contract renewal partner and reseller of the vendor's Digital multivendor customer services arm's maintenance contracts, as the vendor expands the pilot scheme to include a fourth corporate reseller. Joining Keltec Progress, Hawke Systems and CSF as Compaq services sales agents, Compel expects a share in up to £20 million worth of business from the former Digital maintenance division.
November: Compel issues a profit warning while admitting that it expects up to two-thirds of its user base not to authorise any more spending before the end of the calendar year, a greater slump than originally anticipated. The group's broker, SG Securities, revises annual profit forecasts to June 2000 - excluding goodwill - to around £4 million, down from the £9 million originally forecast. Profit for 2001 is also downgraded from £14.5 million to £13.5 million. As one of the largest IT stocks to issue such a warning in the UK, it causes a fall in share prices throughout the IT services sector.
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