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November 9, 1995


By CBR Staff Writer

Name and fame are the reasons behind Computer Management Group Plc’s proposed simultaneous flotations on the London and Amsterdam stock exchanges, said chairman Cor Stutterheim, as the company issued its pathfinder prospectus yesterday (CI No 2,757). CMG is coming to London and Amsterdam via a placing and intermediaries offer of 3m new shares to raise around ú7.5m of new money after expenses, not that we need the cash, emphasised Stutterheim. The new money will be put in the bank, some of it to be used on small in-filling acquisitions in its current markets of the UK, the Netherlands and Germany. The 3m shares will represent about 5% of the enlarged share capital and the price is likely to be between 270 pence and 300 pence. They will be split about two thirds to one third in favour of London. A number – as yet unknown – of existing shareholders will also be selling stock at the same time, including Stutterheim and chief excutive Gerard Lucassen, which will amount to around 20% of the enlarged share capital. Employee-owned CMG has a lot of small investors and says it has not been possible to determine how many are selling and how much. The London-based computer services company had aborted a plan to float in London in the spring because of a string of bad news from some of its UK competitors (CI No 2,614), taking a ú453,000 hit in the process. But the news from the likes of Logica Plc (CI No 2,750) and others persuaded the company that the time is now right and Amsterdam, a market that the company had thought of in the spring, but did not intend floating on, has since been added. Around 60% of the company’s 1994 turnover came from systems development and implementation, 21% from processing services and facilities management, 12% from what it called advanced technology solutions, including mobile telephony security, and 7% from management consultancy. CMG, which boasts of never having had a loss year in its 30-year history, sees the Netherlands is most successful market.

Slight blip

The UK had a slight blip at the start of the decade, but has since recovered, and Germany has moved into the black in recent months, having been expanded with the acquisition of a controlling stake in Pecom Unternehmensberatung und datenverarbeitung GmbH (CI No 2,634). CMG’s founder, Douglas Gorman, who died earlier this year, first touted the company’s intention to float within five years in August 1991 (CI No 1,747). Back then, the firm was 100% owned by family, friends and employees, and Gorman’s estate is still the largest shareholder prior to flotation, with 12.2%. At present, around 1,000 of the company’s 2,600 employees have a stake. Employees, including the directors are to be given preferential rights to buy more shares in London up to 10% of the London allocation. They will retain more than 40% of the enlarged company. CMG is forecasting pre-tax profits in the year to December 31 1995 of not less than ú17.8m, after flotation expenses of ú1.7m. Last year, it turned in pre-tax profits of ú14.1m. It is forecasting a final dividend of 3.2 pence, making a notional dividend for the year of 4.8 pence, as if the company had been floated in London and Amsterdam for the entire year. The dividend would be covered about four times by profits. The offer price and the number of shares to be sold and issued will be announced on November 30, with dealing commencing in both markets on December 1. Kleinwort Benson Ltd is advising the company, and ABN AMRO Hoare Govett Ltd is the lead manager and the sponsor in Amsterdam.

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