Shares of Electronic Data Processing Plc today jumped an impressive 15 pence or 26% to 75 pence, despite the company again announcing a fall in interim profits. The firm is still seems to be caught in the throes of transforming itself from a hardware vendor to a software and services company (CI No 2,812). Nevertheless, this has got both chairman Michael Heller and chief executive Richard Jowitt talking of adding more shares to their joint 20 plus per cent stake in the Sheffield-based company. Jowitt put the jump in share price down to a better performance from the company’s software operations than was expected. The software side, which includes the Turnkey Solutions and Published Software Products divisions, expanded its turnover by almost 50% to 5.4m British pounds in total, up from #3.6m last time. This corresponded to a contraction of the hardware business, which is not be phased out altogether, as customers that buy direct expect the company to be responsible for supplying the maintainance and related services for the equipment they buy. The chief executive conceded that the hardware – Computer Equipment – division was no longer a source of profit, but would be retained to satisfy this customer need. Jowitt also attributed competition in the US to the continuing downward trend in profit. Electronic Data, in response to massive price cuts of its US rivals’ products, had to slash prices of its flagship Winlink Open DataBase Connectivity-compliant Windows-to- database integration tool and Viaduct software – to half of what it was this time last year. In terms of future prospects, the Sheffield company is still searching for acquisitions, but hasn’t found anything that takes its fancy as yet. Electronic Data Processing is banking on the Network Computer as the way forward for data processing, at least within the distribution world, and is currently incorporating HyperText Mark-up Language, Java and Visual Basic into its database management systems. It expects to have a Java-enabled version of its UniVision package by mid-summer.
