Although full-year profits at futures and options computer bureau and software specialist Rolfe & Nolan Computer Services Plc were hit by losses from US counterpart Brokerage Systems Inc, the rest of the group achieved record growth. And as expected, Rolfe took the plunge in April and acquired the remaining 80.1% of shares in Brokerage it didn’t already own. As a run up to this, the London-based group devoted a good deal of managment time to restructuring the US operations, mainly in the sphere of sales and customer support. According to chief executive Michael Warburg, it is also running a tighter ship to keep costs under control, and is trying to improve the company’s image by ensuring that software and services are delivered and implemented on time. Although he said he would be happy to see Brokerage break even by the end of the 1993 fiscal year, he did add that this would depend on the timing and amount of licence sales made. Group pre-tax profits for the year ending February 28 fell 12.5% to UKP1.2m. But if Brokerage’s UKP493,000 losses are not included, these actually rose 23% to UKP1.7m. Turnover increased 66.7% to UKP11.2m, some UKP8m of which came from the US company. Even though Rolfe only held 19.9% of BSI at the fiscal year end, accounting rules dictate that it include 100% of BSI’s turnover and profit figures in the group total. This does not translate into earnings per share, however, which rose 11.3% to 17.7 pence. The board is recommending a final dividend of 4.65 pence per share. Taken together with the interim payment of 2.55 pence, this makes a total of 7.2 pence for the year – a rise of 16%. The final dividend also includes an element of compensation to shareholders for the UK government’s decision to reduce tax credits from 25% to 20%, announced at the 1993 Budget.

Currency turmoil

The rest of Rolfe’s business experienced patchy, but sustained growth. Some 62% of European turnover comes from the UK, the rest from Germany, Austria, Switzerland and Italy. Overall revenues from licence sales for the year increased to UKP1.7m in 1992 from UKP1.3m in 1991. This also led to a 38% rise to UKP1m in turnover from software support. But while seven new licence sales were signed in the first half, this dropped to only two in the second due to currency turmoil, recession and political uncertainty in mainland Europe. Sales of additional modules and upgrades remained steady, though. Nonetheless, the same uncertainties that caused a slowdown in licence sales brought about a record increase in the volume of business processed at the London data centre as customers speculated on currencies in the futures and options market. This, together with the addition of six big new unnamed customers and a lower than usual number of client losses, led to an 11% rise in turnover to UKP4.5m from the bureau and facilities management services division. Revenues generated from repeat business now account for 74% or UKP5.9m of total Rolfe sales. Finally, Warburton is quite optimistic about prospects for the year ahead. Bureau trading volumes and sales of additional modules in both Europe and the US remained healthy in the first quarter, he said, while prospects for new licence sales are good. Although orders are slow to come through, a large number of European licences are due for renewal within 18 months, which represent a significant source of potential revenue.