An 80% rise in development costs during the year ending April 30 1989 was the explanation offered by Learmonth & Burchett Management Systems’ Rainer Burchett for a 24% drop in pre-tax profits, down to UKP1.45m from a figure last time of UKP1.9m. Top of the 1989-90 agenda is the drive to bring development spending down from its current level of 16% of turnover, to around 12%. However, marking what Burchett des-cribed as a significant second half improvement, turnover for the period rose 19% to reach UKP12.8m, while dividend per share earnings were raised 18%, to 2.0 pence from 1.7p. The bulk of the development costs was divided between increasing the functionality of the forthcoming release of Auto-mate Plus, now a significantly larger project than originally envisaged, and extending the product to meet emerging international standards. The remainder went on extending the company’s existing product line, and expanding and integrating development methodologies, culminating in the recent launch of LBMS Information Management. The company also saw considerable improvement in the US, where its distributors, Cullinet Software Inc, recorded disastrous sales of Auto-Mate Plus during the first half of the year. During the second half, Cullinet’s contribution saw a recovery, rising four-fold to reach UKP144,000; LBMS has now opted to to renew its contract with Cullinet for another three years. However, according to joint managing director Roger Learmonth, the renewal is underscored by a revamped deal, shortly to be signed, which represents a more even, closer, and much simpler arrangement. The chief problem marring the two companies’ past dealings appears to have been Cullinet’s insistence on keeping LBMS at arm’s length. In addition, LBMS has signed deals with eight other US companies, and has expanded its direct selling Houston operation, now trading profitably in its own right; second half US revenues climbed to UKP837,000, for an annual total of around UKP1.4m. In the meantime, LBMS distributors in Europe, Canada, Aus-tralia and New Zealand appear to have fared a good deal better: profit contributions excluding the US trebled during the year, to reach UKP182,000. Future plans include geographic expansion, diversification into turnkey projects, general consulting, the inevitable systems integration, and carrying on with the constant and continuous search for an appropriate acquisition.
