Sign up for our newsletter
Technology / AI and automation

DIVERSIFICATION INTO IBM, EXPERT TECHNOLOGY PAYS OFF FOR TELECOMPUTING

Telecomputing Plc’s decision to diversify from its traditional ICL-based teleprocessing monitor products looks thoroughly justified judging from the company’s first results since the launch of TOP-ONE, a multi-user expert systems package that runs on IBM, as well as ICL, mainframes. Although sales into IBM sites had little impact on revenue in the six months to March 31 1987, the evidence from the interim figures is that the effort expended on the IBM side of things did not unduly affect the rest of the business. Indeed, turnover was up 20% to UKP1.7m and pre-tax profits were up 11.2% at UKP452,500 despite the costs of introducing the new product. Furthermore, the company says that interest in TOP-ONE is running at an unexpectedly high level in the UK. Since the end of the first half, two sales, each between UKP85,000 and UKP100,000 have been completed, and fifteen ‘Show Me’ projects are currently on the go. These involve Telecomputing personnel producing on-site basic expert systems applications to allow potential customers to evaluate some of the possibilities of TOP-ONE. Originally, the management thought that only the US, where Telecomputing does not as yet have a major presence, would be ready for such advanced technology. Now, it will concentrate on establishing the product in the UK before extending out into continental Europe while US sales are likely to be handled by several third parties, thus reducing Telecomputing’s expenses. The one dull spot in the interim figures is the expected dramatic rise in taxation from UKP58,000 in 1985-6 to UKP132,000, around 35% of profits, in 1986-7. As a result, net profits and earnings per share fell by 8.1% in the period under consideration. For the year to September 31 1987, pre-tax profits should be close to UKP1m. At this level, assuming 35% tax, the shares at 233p are on a prospective price-earnings ratio of below 17 – cheap compared with most stocks in the sector.

White papers from our partners


This article is from the CBROnline archive: some formatting and images may not be present.

CBR Staff Writer

CBR Online legacy content.