According to Chairman Richard Guy, 1992 has been one of the most difficult years faced by Gloucester-based Sherwood Computer Services Plc. It has had to cope with a double whammy of recession coupled with turbu-ence in the Lloyd’s insurance market which accounts for 50% of its business. Nonetheless, it has pulled in record pre-tax profits, up 22.8% at UKP3.0m on turnover off just 2.9% at UKP21.1m. And its balance sheet is looking healthy, with net assets standing at UKP7.1m. It is recommending a final dividend of 5.25 pence. The company financed four acquisitions and one joint venture during the year and spent UKP1.25m on BS5750 certification for its housing management, retailing and government systems. The minor drop in sales was accounted for by the Guardian joint disaster recovery venture with ICL (CI No 1,664) but is not considered serious. Indeed the business was said to have made the very best of progress and its move to open syst-ms is reckoned to stand it in good stead for the fut-re. The government and housing divisions were said to have yielded the lowest returns and action is promised to boost their performance. The clouds looming over the Lloyd’s market seem to have been silver-lined, having boosted the demand for Sherwood’s systems. It reckons to have increased its share to 30%, winning major contracts for its Senator underwriting product from Guardian Royal Exchange, and Folksam and striking deals for its other underwriting system, Sceptre, with Lloyd Roberts & Gilkes and with Lloyd’s management agency Sturge Plc. The last is particularly important as it should provide good long term revenue prospects. It is also aiming for BS5750 creditation on service.
Acquisitions to continue
It is also seeking to modify and extend its product range. It has new modules for Sceptre and Senator; it is collaborating with another unnamed software house on a broking evaluation product, which is about to be tested. Acquisitions have formed an important part of the strategy and will continue to do so. In 1992, it took three competitors from the London insurance market under its wing: Cairn Computer Systems with its Ingres-based technology and accompanying client list was bought for UKP200,000. UKP800,000 was raised through a share issue for the City division of Weir Systems (CI No 2,076) which also added open systems expertise more long term contracts. And THS (Guernsey) Ltd with its specialism in the mainframe market was acquired for UKP300,000 (CI No 2,114). From the financial services market, Sherwood picked off Consort Data Ltd (CI No 2,017), with its personal computer stockbroking systems, for UKP250,000 – and has already notched up eight sales. It also sunk UKP255,000 into a joint vent-ure, Sherwood International Ltd (CI No 2,114), to buy the rights for the Informix-based life assurance system, Palace, from Beta Computers (Europe) Ltd. Sherwood aims to exploit the product’s existing UK and overseas customer base and has a further three cli-ents, to be announced soon. The company says it has been able to generate high levels of repeat income from long term contracts in the financial services area and is keen to collaborate with other suppliers to expand its service and product range. For example, it is currently working with major client Scottish Provident, which accounts for 10% of its turnover, to convert its ICL-based systems to IBM mainframes, with a view to further re-engineering for open systems. Sherwood’s housing and government divisions generated significant repeat revenues and a number of new sales, but performed below the company’s average. Local au-thorities in Norwich and Derby took the Threshold housing management system, Merseyside Improved Housing and Peabody Trust took the Household system for housing associations. Work is also under way on a project for the Ministry of Agriculture, Food and Fisheries. Sherwood looks for more such business on the back of BS5750 approval, fast becoming an essential requirement for government tenders. It sees the outlook as encouraging, thanks to expanding insurance bus
iness and repeat business that now makes up 65% of sales.
