Sherwood Computer Services Plc has reported its half-year interims and showed a pre-tax profit of UKP580,000, compared to interim losses of UKP1.5m in 1988, and a UKP1.9m loss at year end. In April, the company received a cash injection from British & Commonwealth Holdings’ B&C Ventures, when the latter subscribed to UKP2.5m of convertible preference shares, approximately 25% of Sherwood should British & Commonwealth choose to convert them. The company didn’t pay a dividend last year, but is now paying 0.75 pence, a conservative figure that reflects the convertible shareholding. Sherwood has undergone a reorganisation since it reported last year’s loss, and group chairman, Trevor Entwistle, acknowledges that a shake-up was necessary. He says that mistakes were made during 1988, and believes that management lost its way because there was a lack of guidance and control. Managers are now given monthly targets, and their salary reflects their success or otherwise in meeting those targets. In addition to establishing a new style of personnel management, Sherwood has been split up into separate divisions, each division trading as an individual profit centre. Sherwood Computer Centre provides services to Lloyd’s insurance brokers, and does software development. It reported an interim turnover of UKP6.5m, and is a major contributor to group income. Sherwood Public Services was acquired in 1987, and supplies systems, software and services to the local government sector. It has recently been involved with ICL on systems for Housing Benefit and the Community Charge, and it has achieved a turnover of UKP1.7m this year. Sherwood Financial Systems, formerly Sherwood Computel, was acquired in 1985, and it targets the financial services market. It reported an interim turnover of UKP1.9m. Sherwood Computer Management, previously Sherwood Locum, was bought in 1986. It supplies facilities management, disaster recovery and stand-by services, particularly ICL stand-by, and it saw a turnover of UKP1.1m. Sherwood Network Services specialises in network and communications design, and Sherwood Software Services provides software development within the Group. The group is negotiating the sale of high street brokers, Sherwood Mitronix. Entwistle says that this division continues to be a loss-maker, and it would require a major investment to reverse the process. Sherwood expects to reap the benefits of British & Commonwealth’s cash in the second half, but feels the current share price doesn’t reflect the firm’s worth. Consequently while it expects to grow and achieve profitability comparable with that of 1987, it is unlikely to expand by acquisition in the immediate future.
