ACT Group Plc has achieved record growth for the year ending March 31 due to a strong performance from its financial software products companies – ACT Kindle in particular. Pre-tax profit rose 20.3% to UKP20.5m, while turnover was up 28% at UKP152.9m. The board is recommending a final dividend of 3.25 pence per share, making a total of fivepence for the year, a rise of 11.1%. Some UKP30m of sales now come from overseas, with Dublin-based Kindle, acquired in December 1991, being the major force behind export growth. The banking and retail software operation won 25 new banking customers during the period and now sells into 65 countries around the world. Growth has been especially fast in the emerging nations, such as Eastern Europe. And although this star performer may contribute relatively little – UKP18.1m – to total group revenues, it is extremely profitable with margins of between 15% and 20%. While Kindle saw operating profits rise 24% to UKP6.3m, the UKP9.2m also generated from ACT Financial Systems means the division now represents over 75% of the Birmingham-based firm’s total profits. But Financial Systems’s export business should not be underestimated either. The operation now has sales and support offices in New York, Frankfurt, Sydney and Tokyo and all experienced growth. Back in the UK, Financial Systems’ NMW Computers Plc acquisition has been completely integrated, and contributed UKP500,000 to profits in the second half of the year. When NMW was purchased in November 1992 for a consideration of UKP6m, it was making losses. But ACT sold the Charterhouse side of the business within days because it was haemorrhaging money, and in a single stroke brought the remaining stockbroker services arm back into profit. The group has now clearly split its activities into two areas: financial software products as mentioned above, and UK software and services. The latter provides general consultancy, hardware maintenance and bespoke software to customers across a range of industries, but, as elsewhere in the business, cannot command margins of more than 10%. So despite contributing the most in revenue terms at UKP76.7m, its profits were only UKP5.6m. This situation wasn’t helped by a very poor performance in the first half of the year by all four of the firms in the division. These comprise ACT Computer Support, which undertakes hardware maintenance; ACT Medisys, which sells software to laboratories; ACT Logsys, which provides information technology services to the public sector; and ACT Cablestream, which sells networking software to the financial and healthcare markets. The worst performer was ACT Logsys, which turned in UKP1m losses in the first half. This resulted in 30 redundancies out of a staff of 150, after which it bounced it back to profits of UKP1m in the second half. The group, which has gone from strength to strength since it off-loaded the Apricot Computers Ltd millstone onto Mitsubishi Electric Corp at a very handsome price, say it believes the turnaround in UK Software and Services can be maintained, and is generally confident of achieving another successful year.
