MDIS Plc, the former McDonnell Douglas Information Systems which turned in modest profits for fiscal 1997 against major losses in the previous year, is now a company with a growth mentality and a very strong, experienced management team to take it there, according to group chief executive John Klein. Having been through some bitterly hard times since its initial public offering in 1994, the Hemel Hempstead, Hertfordshire company brought Klein in at the end of 1995 to attempt to reverse its fortunes, and after a couple of years of quiet, hard slog, Klein seems to think he has done just that. He first stuck his head above the parapet in the middle of last year, to assure the world that MDIS now had a future (CI No 3,250). Following publication of year-end results for 1997 last month showing a profit of 322,000 pounds from losses the previous year of a massive 49.2m pounds, Klein is again confident that he and the present management team now have the foundations in place on which to begin to build. Klein says what was most heartening about the company’s performance, was that all five of its business areas showed growth. Revenues were down slightly in the Public Sector business, which focuses on vertical markets such as the police and the National Health Service, due to recent restructuring, but profits were up significantly according to Klein. This year, he says this business will be back into revenue growth of around 10%, and will continue to focus on bottom line profitability. MDIS’ Corporate Sector business should see strong revenue growth and profit this year, and will focus itself specifically on vertical markets such as retail, telecommunications and pharmaceuticals, along with strategic partners that include Sun Microsystems Inc and Data General Corp. Human Resource Systems, a business sector which was giving MDIS huge problems up until last year, with losses of 17.5m pounds in 1996, saw losses down to 4.1m pounds last year, with 3m of that being incurred in the first six months of the year. Klein says the company has now stabilized the human resources software, moved most of its customers onto the latest release so that support and maintenance costs are slashed, and he believes this business will continue its major turnaround this year. Klein says the goal is to take this business outside the borders of the UK, with the first port of call naturally being the US. In the UK, he says the company happily takes on the likes of PeopleSoft Inc, which he agrees stepped in and filled a gaping void in the industry, but he is confident MDIS software and services, and particularly its vertical market expertise, will enable it to compete worldwide. The tools joint venture with Pro-IV Ltd, 50%-owned by MDIS performed well ahead of plan. In January this year it won a $9.1m support contract with Orbital Communications Inc of Bethesda, Maryland, using the Pro-IV tool, and Klein said the business has a niche which has been well identified, and he expects strong performance from it this year. Finally, the joint venture set up with Fuji’s Ltd to market MDIS’ Glovia ERP Enterprise Resource Planning system, formerly know as Chess, last year (CI No 3,188), has seen revenue growth of 40% in its first year of operation, with orders doubling. Fujitsu put $29m in cash and assets for a 36% stake in the Los Angeles-based company called Glovia International Llc. The initial agreement did not include the UK or Europe, but with profit targets met by the end of calendar year 1997, the joint venture now incorporates this ERP business as well, and as a result, Fujitsu’s stake has been diluted to 30.5%. Klein says in addition to trimming down its real estate legacy to around 7m pounds from some 12.5m, the company has had to do a lot of emotional things to cut costs, but Klein says it has also proved to both employees and shareholders that it is more efficient, and focusing on how to grow the business in the long term. There is still work to be done, says Klein, but he believes his seasoned management team can do it.
