Bryan Mills made his name as co-creator of Computer Management Group, and now he is trying to do it all over again with Pi Holdings. How’s it going? Janice McGinn went along to get a progress report.
Bryan Mills, chairman and co-founder of Pi Holdings, reckons that current market conditions are tight, there is a recession of sorts, but he is cautiously optimistic and anticipates sales of some UKP20m by the year-end. That’s UKP5m less than hoped for originally, but the group now looks much as he wanted it to when he and Bob Fawcett – co-founders of Computer Management Group established Pi Holdings two years ago. Like Topsy, Pi has just growed over the past 24 months, and it now comprises Timegate Computer Services and Timegate Manufacturing, Orion Networks, SIA, CSP, Langton Ltd, and Calidus Holdings as well as having significant investments in Griffin International and Uniface UK.
Ragbag
Mills acknowledges that it looks like a ragbag, but says that while the various divisions are strengthening their positions in niche marketplaces, they are begining to co-operate and become a more cohesive whole. So have the subsidiaries performed as well as expected? Timegate, which he acquired for UKP1.8m, was looking at UKP5m turnover in 1990, but Mills is doubtful that will be achieved this year, and SIA, acquired for between UKP1m and UKP2m depending on the earnout, won’t make its UKP4.1m target, largely because it didn’t shift enough hardware. Langton Ltd, Pi’s Electronic Data Interchange division, is unlikely to reach the UKP1m target forecast earlier this year, but Mills is confident that after a slow start, the company is flourishing, and also building up a strong reputation in the US. However, Uniface UK Ltd, the distribution company Pi jointly acquired with Uniface BV – formerly Inside Automation – is going like a train, and sales are running at over UKP2m per annum, a dramatic increase on previous years. IML, Information Management Ltd, won’t reach its UKP500,000 target, and Mills attributes this to the British propensity to talk of the need for quality monitoring products, but a reluctance to buy them. It will remain separate entity, but is working closely with Timegate Manufacturing. Mills describes Calidus Holdings, the most recent acquisition, as a solid, extremely well run company, and one of the two divisions to have a US presence, the other being Orion Networks. So, performance is still variable, but Mills is confident that profitability will be significantly better than last year. He doesn’t subscribe totally to the idea that the UK is in a recessionary trough, and believes that we are talking ourselves down futher than is necessary. –
A combination of politics, lunatic exchange policy, high interest rates and masochistic British attitudes may have created a recessionary climate, but the UK won’t spiral into cardboard city and there gill come a time when business flourishes again. Given his conviction that all recessions end and the majority of businesses survive, would he consider taking the company to market? Mills has a more measured attitude to the City than many high tech entrepreneurs. He believes that the City is often dubious of senior management but will adopt a tolerant attitude so long as the results are acceptable. But, if a company is secretive and provides inadequate explanations for its actions, then an atmosphere of mutual suspicion can develop. The City may place too much emphasis on quarterly results, often assuming that the pattern of the previous three months is representative of long term performance, but he believes that it can be quite forgiving if problems are acknowledged and it’s kept informed. Mills is obliged to allow his shareholders to realise their investment within five years, and while Pi is a profitable concern, he frankly admits that investors aren’t being rewarded adequately for the risks they are taking. However, now is not the time to float, and Mills says there are alternatives, one of which is a trade sale. But would a trade giant be prepared to take on such a seemingly dis
parate concern? He comes back to his point that Pi may look disparate, but there is a common glue of networking and systems integration, plus a continuity of product offerings that ranges from pre-manufacturing through to distribution and Electronic Data Interchange. Nonetheless, while the loose tendrils have to be pulled in, and Pi has to develop the image of a one-stop provider, Mills disagrees that the company has spread its net too wide to be a potential trade sale. Computer Management Group has over 30 different operations, and when Cap Gemini Sogeti SA acquired 70% of Hoskyns Group Plc for what is expected to be just under UKP200m, that company’s wide-ranging activities were regarded neither as disparate nor a negative factor. Regardless of buyouts or flotations, how does Mills see Pi Holdings developing over the next few years? EnthusiasticHe’s very enthusiastic about the Miracle software that Calidus acquired from the now bankrupt Headland Group. Much of the blame for Headland’s fall has been placed at Mega’s door, and many believe that Mega’s attempts to convert Miracle for the DEC VAX was a ruinous thing to do. Mills disagrees, saying that the implementation has been completed successfully. When Calidus bought the software, it also recruited Mega’s technical team and key marketing manager, and Calidus now has several users of Miracle on the VAX. Perhaps Headland’s demise raises the question of just how successful hardware gurus can be in the world of software and services? Pi has still to enter the Unix market, but Mills admits that it isn’t for want of trying. He has made three serious attempts in the past year to acquire a Unix company, one of which fell apart during final negotiations – much to his chagrin. 1991 won’t be a period of enormous growth for Pi but rather, a time in which to consolidate and develop the concept of total services – though Unix, the US and Europe undoubtedly loom large in the Pi mind. And there is one thing on which Bryan Mills is categorical: he hasn’t made his last acquisition.
