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June 24, 1987

DDT LOOKS READY TO BE ACQUIRED

By CBR Staff Writer

Freudian slip it may have been, but DDT Plc chairman James Crook yesterday hung out a clear for sale sign over the company when he responded to the question have you had any offers to buy the company with an answer that implied strongly that an approach would be welcome. He quickly withdrew this and dismissed it as a facetious comment, but the tenor of his remarks, announcing a 49.5% slump in pre-tax profits for the year to March 31, made it clear that DDT was beginning to feel like a minnow swimming in a sea of sharks. Turnover too was down overall, by 3% to UKP6.9m. Third party maintenance now makes up the bulk of the business, with turnover up 28% to UKP5.3m – but DDT is not the only company that has spotted that third party maintenance of micros is a lucrative business with strong growth potential, and it is beginning to become extremely competitive. As a result, finance director Neil Spence admits that margins will never again reach 1986 levels, but still looks for improvement in the current year – it reckons that competitors have been buying business, making unrealistically low tenders to grow market share, and then disappointing customers. DDT tried to buy the Mills maintenance business last year, but lost out to Extel Group – and then found itself faced with a fiercer competitor. It also tried and failed to acquire Ansafone, but is still on the look-out for acquisitions, chiefly among the small fry of the business, and did manage to pick up a Scottish business that took it into accounting machines. On the marketing side, once the company’s core business, sales slumped 46% to UKP1.6m, and it is now concentrating on peripheral and industrial markets. Despite cutting staff 20% on the sales side, employment overall increased by some 34%.

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