Quality Software Products Plc chairman Alan Mordain is a very happy man. After investment totalling around ú21m and six long years, he can see the fruits of his company’s labours at last. Around half of the investment was in the unique Multi Cross-Platform Engineering architecture, and as the foundation for the Universal OLAS accounting and procurement software it has proved successful. The Gateshead, Tyne & Wear financial software company saw pre-tax profits leap 354% to ú2.5m from turnover up 24% to ú16.5m in its first full year since flotation. Mordain believes that the technology is now proven as Universal OLAS had its first live installation last August, and has since been installed across a variety of operating systems. There are now more than 60 Universal OLAS installations in 20 different countries. The product is available on IBM Corp MVS mainframes and the RS/6000 Unix family, Hewlett-Packard Co’s HP 9000, and Sun Microsystems Inc Unix systems, and on the Sequent Computer Systems Inc Symmetry multiprocessor hardware under Unix. It interoperates with mainframe DB2, Unix Sybase, Oracle and Ingres relational database management systems. Mordain maintains his faith in the mainframe, describing it as an extremely good box, perhaps a bit overpriced. However, he was keen to emphasise the adaptability of Universal OLAS, citing one customer – an insurance company with offices on three continents – that is currently running the software on a Hewlett-Packard HP 9000 system and has requested migration to an IBM AS/400 running DB2/400. Mordain believes that no other company has Quality’s level of scalability, including principal rival SAP AG, but SAP has a few years ahead of us in terms of commercial exploitation, he admits. But Quality is now in the business of exploiting its investment and aims to make the ground up quickly. Product revenues jumped 106% to 3.7m, as commercial growth replaced development growth and the turnover increase fed straight down to the bottom line. Ma intenance revenues have been static at ú2.5m, but these will increase as warranties increase with installations.

Prognosis

Service revenues grew by 20% to ú3.0m, as income from this picks up quickly after installation. The US joint venture with Global Software Inc (CI No 2,359), from which Quality gets 45% of product licensing fees, achieved its first sale of Universal OLAS to Avis Inc in New York. The next targets for expansion are continental Europe and the Asia-Pacific region. The balance sheet shows 35% gearing, described as about right considering the level of investment by finance director Mike McManus. Investment in product development amounted to ú3.5m in 1994, but this will drop by 80% this year. Long-term net borrowings stood at ú5.5m at year-end and cash balances were ú450,000. The group aims to employ about another 40 people worldwide this year, which will bring the headcount to about 485. Now that development of Universal OLAS is largely completed, Mordain is relieved he can stop worrying about whether it is going to work or not. The board recommends a final dividend of 3.5 pence, making a total up 260% to 4.5 pence for the year. Quality’s share price jumped 22 pence to 390 pence at the news and Mordain is confident for the future: The prognosis is pretty damn good, he said.