The ‘Beware’ warning that our sister paper Technology Research issued to investors when Fletcher Dennys Systems Plc went public back in July (CI No 475) has proved to be sadly prescient. The Hatton Cross-based IBM Personal Computer dealer and software house announced at the end of last week that it will report a loss of around UKP500,000 for the year to March 31, rather than the expected profit of UKP600,000. It thus joins a long list of newly floated computer companies such as IBL Plc and PPL Holdings Plc, that have failed to live up to initial expectations. Chairman Keith Bull says that the main problem has been lack of orders from local authorities. Traditionally, councils have provided upwards of 35% of Fletcher Dennys’ turnover with the bulk of their orders crammed into the last few weeks of their financial year which finishes at the start of April. This year, however, according to Bull, UKP2.5m worth of orders for which the overheads were already in place simply failed to materialise and that was componded by delays, due to takeovers, in two important corporate contracts. Bull, like the management of PPL, admits going public took up more time and management effort than expected and led to a certain amount of complacency. As he puts it, going public gives one the feeling that one has arrived but we are one of the smallest listed companies and if someone sneezes we fall over. In a bid to get the show back on the right road, the company has made 15 people redundant, appointed a new finance director Patrick King and a still-to-be-announced managing director, said goodbye to one of its founders, corporate strategy director Dick Dennys, and reduced its public sector target for the year just started to UKP2m from around double that. In view of what Bull describes as the turmoil in London local authorities this seems to be a sensible first step, but the deterioration in margins in the Personal Computer business has already proved the death of Entr, First Computer, and Interface Network Plc amongst others and caused Micro Business Systems to catch a nasty cold from which it is only now starting to recover. Investors, not too surprisingly, were not impressed by Fletcher Dennys’s statement, despite the board’s optimistic outlook for the current year, and the shares lost 12p to stand at 52p, down 18p on the placing price arranged by Capel-Cure Myers on the firm’s Unlisted Securites Market debut last June.