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  1. Technology
April 9, 1987


By CBR Staff Writer

Since the turn of the year, Atlantic Computer Plc’s share price has nearly trebled and the move for one of its only two remaining UK-listed independent rivals (see front page), combined with its 1986 results and future prospects, is likely to give it yet another nudge upwards. Atlantic’s results showed full-year turnover up 75% at UKP320m with pre-tax profits up 45% at UKP21.61m despite the company’s decision to stop including the expected residual value of new machines in its accounts, a move which is estimated to have reduced the profit figure by around UKP5m. ICA, Atlantic’s recent Dutch-based acquisition (CI No 579), which has just won permission from a lower Dutch court to proceed with its joint action with IBL and Econocom against IBM for predatory pricing (CI No 629), contributed UKP2.59m to profits. With the exception of the manufacturing division whose Lion Systems spent heavily on research and development to bring the Orator Personal Computer communications products to market (CI No 611), all parts of the current Atlantic business did well. Lion managing director Warren Palmer, who employed Foulston as a salesman when he was UK head of Memorex in the early 1970s, has recruited several senior staff from Motorola Information Systems and is looking to double everything this year – including expenses. Foulston is expecting similar growth from the DEC Systems Division which Atlantic bought for what now looks like pocket money – UKP2m – in 1985. With turnover up fivefold to UKP18m and pre-tax profits up 350% to UKP1.75m, the division is targetted to account for 20% of group turnover by 1990.

Discount agreement with DEC

Its growth will be fuelled by the imminent signing of a multinational discount agreement with DEC which will give Atlantic the right to buy from DEC at local prices in the UK, Germany, the US and Canada and with discounts of anything up to 40%. The ICL leasing operation, which only got going in September and then only in the UK, has pulled in over UKP10m of additional revenue – on 40 machines – in the interim period. On the IBM front, Foulston predicts that the faster channels and bigger disks that IBM has been rumoured to be launching since last September will lead to greater disk sales and persuade users to migrate from top-end 4381s and old 3081s to small but new 3090s instead of taking secondhand 3084s coming back off lease. In his presentation to City analysts, Foulston described Comcap as a good geographic and product fit. More than 50% of Comcap’s business is from IBM and PCM peripherals with most of the rest from small systems from the same manufacturers. Atlantic, on the other hand, concentrates on the big IBM mainframes, does no plug-compatible business, and has growing interests in DEC and ICL kit. Territorially, Comcap does around 30% of its business in each of UK, Germany and Denmark with the remainder in France, Switzerland, Sweden and Holland. Atlantic is far bigger in the UK, Holland and Germany and has operations in Spain, Belgium and the US. Foulston forecast savings in France and Germany. Comcap’s results announced late last month saw pre-tax profits up, almost identically to Atlantic’s, by 47% to UKP7.6m on turnover of UKP82m. Chairman Schneider is retiring and Nick Kennedy-Scott and Barry Sack, joint managing directors of Comcap are to become Atlantic finance director and head of financial services, which includes Comcap’s Docklands property arm, respectively. The news sent Atlantic’s share price up 40p to 633p while Comcap’s leaped 103p to 608p.

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