With International Data Corp forecasting that sales of modems will reach 900,000 units by 1991, Wimbledon, London-based modem designer Dataflex Design Group Plc is hoping to make the most of the expanding market by raising UKP500,000 via an offer for subscription under the Business Expansion Scheme; under the 1988 Finance Act, UKP500,000 is the maximum that can be raised in any one year under the Business Expansion Scheme by a qualifying company not involved in assured tenancies or ship chartering. The company is offering 500,000 ordinary 10p shares at UKP1 each out of a total issued capital of 1.7m, shares, valuing the company at UKP1.7m. The Business Expansion scheme was established by the Finance Act 1983 and gives tax relief at the individual’s top rate of tax on sums invested in certain qualifying companies. Dataflex employs 20 people and has been around since 1985; it sells seven British Approvals Board for Telecommunications certified products in the UK through six distributors and approximately 400 dealers. After encountering initial problems with a UK distributor it has returned pre-tax profits of UKP47,000 on a turnover of UKP1.1m for the financial year ending March 31 this year: it is projecting profits of UKP265,000 on turnover of UKP1.8m for 1988; UKP405,000 on UKP2.5m for 1989; UKP569,000 on UKP3.3m for 1990, based on the full subscription being achieved. The money will be used to expand and up-date its range of communication projects and establish a stronger market position in the rest of Europe. Following the subscription, permission to deal in the company’s shares on the Third Market can be applied for at any time, and on the Unlisted Securities Market after three years, without the company losing its Business Expansion Scheme status. Europe outside the UK accounts for between 15% and 20% of sales, primarily in Holland and Spain, but it has problems selling in Germany and France due to the various approval standards. A company spokesman said the board would be looking for a listing on the Unlisted Securities Market in three years time which would tie in nicely with 1992 and the arrival of common approval standards. The minimum subscription is only UKP500, the minimum an individual may invest in one company in order to qualify for tax relief under the Business Expansion Scheme, and with a track record already established, Dataflex is worth a look. Prospectuses can be had from Matrix-Securities Ltd of Clapham, London. Subscription is on the usual first-come, first-served basis and the offer will close on October 24, but may be extended if less than the full UKP500,000 has been subscribed. Top-rate taxpayers who invest by October 27 – the date has been extended from October 6 in light of the chaos caused by the postal strike – can carry half their investment back to last year and get relief on it at the then-ruling 60% tax rate rather than the current 40% top rate.
