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April 8, 1997updated 05 Sep 2016 12:05pm

DCS, UP 50% LOOKS TO ENHANCE ITS MARGINS

By CBR Staff Writer

At DCS Group Plc they’ve seen the future, and it’s in people, not products. The Leamington Spa, UK-based computer software and services company has produced some convincing six month results with net profits up 50.0% to 1.3m pounds on revenue that rose 33.2% to 19.1m pounds. And for every pound of DCS’s revenue generated from product sales, three more comes from supplying services. Chief executive Bob Williams is very proud of his software products, but in the long term DCS is a computer services company, because this is where the future lies. Revenue was boosted this period by the acquisition of the remaining 66% of French associate GBM Finances SA (CI No 3,126). GBM is based in St Nazaire and supplies motor dealer systems to the French market. Williams is keen to get DCS people in as soon as possible and make the new subsidiary start performing. But don’t expect further purchases too soon. DCS will only resort to acquisition where timescales do not allow for internal growth. The core products continue to be the CIEL Computer Integrated External Logistics package used in supply chain management, and the Global DMS product supplied to motor dealers. DCS is confident that its long-publicized difficulties with Global DMS have finally been put to rest. Williams admitted that market pressures brought the product out too early, but he promised This is the very last time you’ll hear me talk about problems with GDMS. Williams is also keen for DCS to jump on the year 2000 bandwagon. He predicts this to be a big earner once the panic button is pressed. I’m appalled by the head-in-the-sand attitude adopted by some companies, are these managers planning to retire before the millennium? he asks. But growth may be curtailed by a lack of resources. In common with everybody in this sector, DCS is struggling to recruit enough consultants and is fighting hard against the market trend for staff to go freelance. Contrary to conventional wisdom, Williams sees the problem creating increased profit margins as salary increases lead to even bigger hikes in fees. DCS has changed its year-end to December 31. It proposes a final dividend of 0.75p, being the only dividend for this six month period.

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