A return to profit for the full year was predicted at the six month stage by Computerised Financial Solutions Plc (CI No 2,502), and the Basingstoke, Hampshire-based company duly delivered, though unrelieved losses overseas resulted in a drop in net earnings. The company, which provides software, support and services to financial institutions and manufacturers for inventory management and consumer finance, reported pre-tax profits up 6% to ú350,617 from turnover down 7% to ú3.1m in its first full year on the Unlisted Securities Market. The CreditLine Plus inventory management system was introduced in October, around three months later than planned, and cost around ú800,000 in development during 1994. The first licence was sold to Lloyds Bowmaker and negotiations continue with other UK and continental companies. Computerised has been in the inventory management business for nearly twenty years, but only set up its US office in Burlington, Massachusetts last June, on the back of the proposed launch of CreditLine Plus. The US office absorbed ú100,000 in start-up costs, but it did sell its first licence, to BMW Financial, during the year.
Seeking a buyer
The performance in the UK was described as satisfactory by chairman Tom Brockbank in his statement. A combination of holding off marketing the old CreditLine Automotive system in favour of the new version, and the subsequent delayed launch meant that benefits in cost savings from consolidation of all UK operations to one office in Basingstoke were reduced. The office in Leeds is currently empty, seeking a buyer. The other arm of the business is Retail Financial Services, RFS. It signed with Toshiba (UK) to administer credit for retail customers for its independent dealer network in early 1994, with Baring Brothers & Co Ltd provided ú20m credit facilities. The results have been disappointing, but RFS was quick to stress that as a mere transactions administrator, it was not affected by the recent debacle at the bank. RFS is split between Computerised and Rotch Credit Ltd, which also acquired a 4.9% stake in Computerised from IBM UK Ltd in January, with an expectation of taking the balance of IBM’s shares in the future to become a 14% shareholder. The flotation (CI No 2,339) raised ú856,000 after expenses. Some ú360,000 was used to pay IBM UK the first instalment to acquire its preference shares, with the balance split between development and working capital. Brockbank predicted pre-tax profits for this year significantly north of where we are now, probably some ú500,000. However, due to the nature of the business, a contract here or there would boost the figures significantly. The board is recommending a maiden dividend of a penny a share.
