Hi-tech failure sells in hours

WITHIN hours of going into administrative receivership, the innovative multimedia firm Next Technology has been snapped up by Virgin Interactive Entertainment, writes Paul Rodgers.

The receivership came after shareholders including Carlton Communications, the Philips electronics giant and St Johns College, Cambridge, declined to put up more cash.

Next's assets and staff of 20 were picked up for an undisclosed sum last Monday. VIE, part of the US video chain Blockbuster, also took over Electronic Sound and Pictures, Next's sister company.

Next was one of the first European firms to explore CD- ROM and CD-I technology, which can combine text with graphics and video clips. It was set up in 1987 by Graham Brown-Martin, 30, a would-be musician who had discovered that he could pay for his drums by writing computer games. The firm's main products were interactive training programmes for corporate clients.

Its earnings track record was spotty. It made a pounds 100,000 profit in the year to March 1993 but lost pounds 90,000 this year. And although its technology was cutting edge, it had no high- profile titles on the market.

VIE's interest is in the staff, which it is likely to put to work on interactive music videos and computer games. 'They had an exciting team that we wanted to keep together,' said Hilary Cranny, VIE's finance director.

The receiver from Coopers and Lybrand wanted a quick sale because the firm would have been worth little if the staff were allowed to disperse.

Mr Brown-Martin, the firm's managing director and majority shareholder, said Next got into trouble two months ago when a large client postponed several projects.

'That work represented a six-figure sum,' he said. 'We knew that unless we replaced that business we would face cash-flow problems. In the event, the worst happened.'

The purchase price is expected to pay off Next's creditors but will probably leave next to nothing for shareholders.