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April 12, 1988

ATLANTIC COMPUTERS SHOWS GROWING STRENGTH FROM DEC BUSINESS, DIVERSIFICATIONS

By CBR Staff Writer

Companies that were quick to latch on to the fact that IBM is no longer the only game in town when it comes to computers for large corporate accounts are really reaping the benefits from the emergence of DEC from the pack to become a recognised and convincing alternative to IBM. And one company that recognised the trend and acted on it was Atlantic Computers Plc, regarded when it came to market five years ago as a plain vanilla IBM leasing shop. The company’s latest figures, for the year to December 31 (see Company Results), show Atlantic’s DEC businesses, bolstered by acquisitions, recording operating profit up 69% at UKP4.2m on a turnover of UKP55.5m, representing 11.6% of group operating profit, 8.8% of turnover. Since DEC overall is now up to one fifth the size of IBM, there is clearly enormous scope for further expansion in a segment where competition is scattered and fragmented. In the core computer services group, profits were up 25% at UKP29m on turnover up 41% at UKP531.6m, to which the IBM leasing business of Comcap Plc was added during the year, and the company also expanded Down Under with acquisition of Sydney IBM and DEC broker CBF Group in September. The Communications & Power division – Atlantic Networks and MPL Power Systems fared less well, with Networks suffering the commercial failure of its much-touted Orator product for the personal computer market, and therefore made an overall loss, although it looks to a string of new products, many of them from third parties, to transform the picture this year. Power supplies were satisfactory, but the group as a whole made a trading loss of UKP2.8m on turnover flat at UKP13.4m. The Financial Services Division, mainly now the property side of Comcap, is seen as a strong future contributor on the back of investments in Lon don’s Docklands, and this time made UKP7.8m on turnover of UKP30.2m. And Atlantic is not neglecting its small medical business acquired five years ago: the unit announced yesterday that it had acquired six speci alist Care Homes – nursing homes and sheltered accom odation – in South Wales for UKP3.1m and up to UKP4.1m. With pre-tax up 37% overall last year, Atlantic is keen to damp down over enthusiastic forecasts from analysts for the current year, but looks in very good shape to weather any storms that may be just around the corner as it steadily cuts its dependence on the occasionally very high-risk IBM leasing business.

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