Some improvement in performance has been reported by W1, London-based Learmonth & Burchett Management Systems Plc for the year to April 30. The software engineering tools company cited former problems, such as out-of-date product lines – a situation that the company now hopes it has dealt with – poor integration of various acquisitions, and unforeseen competition from abroad as the reasons for decline in the past two years. Nevertheless recovery, although still not satisfactory, according to chairman Rainer Burchett has now been experienced across all areas of operation, mainly in the second half. Each geographic trading area has ended the year in profit. The company says that this is down to tight cost controls, a changed market focus and improved effectiveness in sales and marketing. Other factors include increased trading abroad, which now accounts for 30% of revenue; the US operation, LBMS Inc, increased turnover by 49%, while LBMS Europe’s sales jumped by 67%. In addition, the company maintained its level of expenditure on research and development and as a result was able to expand its software range even when things were bad; this was a calculated, but clearly a necessary risk for such a fast-moving industry sector. The company has also seen a partial return to long-term information technology planning strategies among some customers. The company has been hit hard over the past two years by a weak economic climate, but currently is attempting to refocus its activities. A move towards increased levels of independence within its three divisions has resulted. The three comprise methods and software tools; information technology consultancy; and education and training. Software now contributes 43% to revenue against 28% in previous years; consultancy accounts for 38%, down from 45%, and the badly-hit training sector now constitutes only 18%, down from 26%. The improved trading performance helped strengthen a still weak balance sheet and short-term borrowing fell by 43% to UKP1.3m. Pre-tax profits amounted to UKP178,000 against losses of UKP1.3m last time and turnover rose 9.8% to UKP2.1m. Although sustained growth may seem a fairly distant goal at the moment, with improvement quoted as being dependant on economic upturn, Rainer Burchett does believe that this is achievable in the next few years.
