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Refocussed DCS looks at downsizing options

Dealer management systems specialist DCS Automotive, part of the DCS Group, is undergoing extensive restructuring, including job cuts, to provide a solid platform for IT product and service launches planned for next year. Stephen Yapp, appointed DCS Group chief executive a year ago, has been assessing which areas of the business to sell or downsize.

He has cut a number of jobs at the eBusiness division, but insists the operation will continue to trade - just with more realistic targets. “We still have good penetration with the top dealer groups,” he says.

Share prices illustrate the struggle of DCS - and the IT industry in general. Eighteen months ago shares in the group, which includes Transport & Logistics and Industry Solutions as well as Automotive, stood at £20 on the back of buoyant IT; today they're worth about 38p.

The DCS Automotive restructuring reduced turnover from £61.3m in 2000 to £50.8m last year. More importantly, operating losses dropped from £2.2m to £800,000. Yapp divided the division into three businesses focussing on its key markets - UK (where it has 1100 dealer customers), Germany/ Switzerland and France/Spain. They operate as stand alone companies, but with overlaps in marketing, business development and product, where resources can be shared.

“The economic outlook is not great, and there is a lot of uncertainty surrounding block exemption so we need to continue reviewing our business,” says Yapp. “We are putting in place foundations for future growth. We have downsized in the UK, but we are refocussed and ready to reclaim market share.”

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