Italy's Itway launches cost-cutting plan

MILAN, June 16 Tue Jun 16, 2009 10:03am EDT

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MILAN, June 16 (Reuters) - Italian information technology company Itway SpA (ITWY.MI) has launched a short to medium-term business plan aimed at cutting costs and boosting margins, it said in a statement on Tuesday.

In its first half results to March 31, which the company announced at the end of May, Itway swung to a 240,000 euros net loss from a profit of 699,000 a year earlier, with a 7.9 percent fall in sales to 57.7 million.

"The group aims to reach an important pick-up in gross profit (margin) in all countries in which it operates, with a target fixed at 15.5 percent by March 2010," it said on Tuesday.

In the first half, the gross margin was 12.9 percent, a company official said.

In particular, the company intends to cut structural costs and lower its breakeven point in Italy and abroad.

The company plans to expand in "virtualisation" software -- running several applications on one physical server -- via new strategic agreements in order reach annual sales of more than 20 million euros, it said.

The company official said she could not provide figures for existing virtualisation sales but said a new business for the activity was set up in May this year.

At 1336 GMT, Itway shares were up 2.77 percent at 3.9850 euros.

(Writing by Nigel Tutt; editing by John Stonestreet)

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