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February 25, 1993

COMPUTER MANAGEMENT GROUP, UP 5%, SAYS SIGNS IMPROPITIOUS FOR FLOAT THIS YEAR

By CBR Staff Writer

Computer Management Group Plc has reported yet another satisfactory year given the circumstances, according to chairman Ron White, with turnover up 12.8% at UKP116.2m and pre-tax profit up 4.7% at UKP9.5m. Earnings per share rose 3.8% to 41.3 pence. There is still no firm date set for the computer services and consultancy and company’s pending flotation, however. Despite the gossip, White says it will certainly not be happening this year because of difficult market conditions and because the company does not need extra cash right now. Discussions are continuing with advisors Kleinwort Benson Ltd but it will likely be another two or three years before CMG goes public. The company, which operates in the UK, Holland and Germany, puts its success down to its cautious approach. This has meant strict cost control, avoidance of debt and refusal to accept unprofitable business. It has reduced salary increases rather than headcount – indeed staff numbers have grown 11% to 1,714 over the year. There are now around 1,000 employees in Holland, 110 in Germany and the rest are UK-based. Costly acquisitions have also been avoided – and will continue to be for the moment with the company limiting itself to a a number of small scale strategic investments in the short term. The company’s activities are divided roughly into four areas: system design and implementation, which contributed around 32% of 1992 revenues; system and management consultancy, which generated 25%; facilities management, which contributed 30%; and payroll processing, which contributed 13%. Facilities management was seen to be the fastest growing sector, particularly in the UK where CMG won two lucrative contracts to handle share registration and administration for British Petroleum Plc and Arthur Guinness & Sons Plc. Consultancy and also the Payroll business, which operates in the UK and Holland were also said to be doing well. The company services a number of business sectors including finance and government which generate 25% and 23% of its revenues respectively. It has won two substantial orders from the UK Department of Trade & Industry and the Ministry of Defence and reckons it is in a good position to win further government contracts. Other important markets are oil and gas and consumer products which each contribute 13% of revenues; transport, accounting for 7%; communications which contribute 6%; utilities companies, including six regional boards and generators PowerGen Plc and the National Grid that contribute 9%; and associations and charities that contribute 4%. Although it is anticipating that 1993 will be a difficult year, with customers feeling the pinch, the Computer Management Group remains – and as would be expected – cautiously optimistic about its future.

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