The 18-month old restructuring at Research Machines Plc seems to have done the trick with the Abingdon-based educational personal computers builder recording net profits of 1.8m after last year’s 4.8m loss. Turnover rose 1.8% to 66.2m. In October 1992, the company decided to retrench, concentrating on its core educational markets, and cutting 120 hardware research and development jobs (CI No 2,020). This year’s figures show research and development costing just 2.4m, as opposed to 4.6m the year before. This, together with a 1.3m reduction in selling and distribution costs account for much of the turnaround. Basically, the privately-held company’s hardware is now based around standardised components, bought in and assembled. Concentrating its efforts on the UK educational market has also paid dividends, with the company saying that sales to schools and colleges have increased by 10%. Hardware is of diminishing importance, and it is likely that software and consultancy will usurp the personal computer’s main money-spinner role in a couple of years, says director of marketing John Blyzinskyj. Margins in software and services are holding up well, and turnover from its networking software is growing particularly rapidly. RM NET LM is based upon Microsoft’s OS/2 LAN Manager, but with specific tweaks to enable it to cope with 50 hacker-adept school children logging on simultaneously. The networking software has been installed in 15% of UK secondary schools in its first year, says the firm. It is also making some sales in Germany, where it set up a five-staff office a year ago. The Research Machines balance sheet is looking healthier too, with 6.6m to hand, or in the bank compared to 1.2m previously. The directors are predicting further profitable growth this year and are proposing a dividend of 2.5 pence a share.
