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December 6, 1993

ELECTRONIC DATA PROCESSING PLANS BONUS ISSUE, UPS DIVIDEND DESPITE WAN FIGURES

By CBR Staff Writer

Electronic Data Processing Plc of Sheffield maintained that it had enjoyed a good year as it announced its results yesterday in spite of turnover and profit before tax down on last time. In fact, chief executive Richard Jowitt was so optimistic that he and the board decided to propose a two-for-one bonus issue, which if approved at the extraordinary general meeting in February, will result in an increase in share capital to UKP1.3m from UKP436,000. This will make the shares more wieldy according to Jowitt – they are currently trading at around 660 pence. The firm is still hell-bent on becoming a software and services provider rather than a hardware reseller – not surprising following the shrinkage it has seen in its hardware margins over the last year or two. The company, which currently sells its Merchant distribution software on NCR Corp iAPX-86-based kit, announced its Univision object oriented database in June but won’t ship it in volume until February. Univision is its own version of Pick Systems Inc’s database. Turnover slipped 7.7% to UKP14.3m, while profit before tax was down 4.2% to UKP4.7m but it decided to increase its dividend to 5.5p in the year, up from 5.1p last time. Jowitt, who pointed out that services revenue including the licensing of the Merchant product accounted for UKP8m this year – no change there. Meanwhile, the systems side of the business, which includes hardware sales, fell in value by 12.7% to UKP5.8m. This year was the first in which the firm included indirectly related costs when breaking down its research and development spend, which pushed it up 62.1% to UKP1.41m. This, and the reduction in interest rates, and therefore receivables for the company on its UKP10m cash reserves, pushed profit down. The company’s US firms Via Systems Inc and Object Inc, which it bought for the Univision technology in 1992, lost roughly UKP100,000, after research and development costs. At the interim announcement last June, the company predicted they’d more or less break even.

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