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March 3, 1994

COMAC SLIPS INTO LOSS AS IT REDIRECTS ITS FOCUS UNDER PHILIP SWINSTEAD

By CBR Staff Writer

Freelance computer staff contractor Comac Plc showed the strain of recent expansion in its year-end results, as SD-Scicon founder Philip Swinstead settled in at the helm. The firm, of which Swinstead with institutional backing bought a 46% stake in June 1993, (CI No 2,191), reported growth in turnover but also a slight net loss, and announced plans to branch out into the information technology consultancy and systems integration areas. Turnover for the firm increased by 77.8% to UKP19.8m, while a net loss of UKP196,000 contrasted with a UKP253,000 net profit last time. The firm had to contend with restructuring costs of UKP835,000 associated with the acquisition of CSS Trident, which occurred in October. This spend enabled it to close all Comac agency offices and integrate Comac’s agency business into CSS Trident’s offices. The acquisition also cost UKP18.1m – raised by a four-to-one rights issue – of which UKP14.5m was in cash, the rest being new shares. Comac has reserved UKP10m on restricted deposit to support equivalent loan notes payable to CSS Trident, and excluding this amount the firm’s cash reserves total UKP3.4m, up from UKP572,000 last time. After consolidating its agency business with the acquisition of CSS Trident, its aim to branch out into consultancy and systems integration will probably see more acquisitions before the end of the year. In the meantime, the dividend stays at 1.5 pence. Continental European business for Comac, which represents about 15% of sales and roughly the same in profit, was hit slightly by recession.

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