THE Memorex acquisition continues to dog Hanny Magnetics (Holdings), which more than doubled turnover but posted a $137.8 million interim attributable loss for the six months to September 30. The company posted a $82.4 million attributable profit for the same period last year, said chairman Wong Sun. Turnover rocketed to $1.4 billion from $573.1 million. Losses per share were 17.08 cents against earnings of 11.31 cents a share in the previous corresponding period. Mr Wong said no interim dividend would be paid; the company paid four cents a share last year. He said Memorex margins had improved and the Memorex acquisition had boosted group turnover, but overall group profit margins fell because of lower floppy disk prices. He said the group had had exceptional items of $29.7 million for group reorganisation expenses and $28.8 million for write-down and write-off of stocks totalled $58.5 million, he said. Hanny announced in November 1993 that it had agreed to buy the assets of Memtek Products from Tandy for US$65 million and local analysts said the acquisition was still taking its toll. 'It looks as if they were still stuck with substantial amounts of inventory which points to lower margins for the first half of this year,' said Nancy Y M Kang of Salomon Brothers. 'If the company lives up to its challenges the second half could be a lot better.' Rupert Kenna of Schroder Securities also blamed Memorex inventories as well as thin margins and tough markets in the US and worldwide. He said it was 'really a pretty sad story that they got involved with Memorex'. In September, Hutchison Whampoa subscribed to a US$36.38 million convertible redeemable note, giving it 6.15 per cent of the company if fully exercised. Earlier this year, the group announced a placement of new shares, organised by Peregrine, amounting to 24.7 per cent of share capital or 19.8 per cent of the enlarged capital. Hanny's Mr Wong said the rationalisation of the group's North American and European operations would result in a more integrated and focused business. He said the group was in the process of implementing wide-ranging improvements to its financial and budget reporting systems. The group was also reviewing its cost structure in Hong Kong.