ICL Plc still plans an initial public offering after the first quarter of next year and chief executive Keith Todd says it needs a public quotation to be part of the wave of consolidation now taking place in the services industry.

The UK company will have to work hard over the next 12 months to produce figures that impress investors after producing a thumping 152.9m pound ($244.6m) net loss in the year through March 31 on revenue that grew a modest 7% to 2.7bn pounds ($4.3bn).

What plunged ICL into the red this year was a 180m-pound ($288m) write-off after the government dropped its smartcards from the Pathway project to wire up the UK’s 19,000 post offices (CI No 3,668). Leaks from the government suggest major problems occurred during a pilot project of the scheme.

ICL is putting a brave face on the setback, pointing to the 1bn-pound ($1.6bn) revised contract it has negotiated with the post office to install and run a new system until 2005. Todd optimistically claims that the technology developed for Pathway gives the company competitive advantage across a wide range of other business activities.

Operating margins for the year rose from 2% to 3%. Todd acknowledges there is work to be done to achieve a target margin of 6% by 2000-01. But he remains confident of increasing growth and profitability this year that, he insists, will put ICL in a good position for floatation next year.

ICL, still evolving into a services company as it shakes off the legacy of its manufacturing history, says it is concentrating on the industry sectors it knows best – retail, financial services, government, telecommunications, utilities and travel. What it now offers falls into four categories: customer relationship management, e-business, enterprise applications and IT utility.

On the bright side, ICL ended the last financial year with an order book up 74% over last year’s level at 4bn pounds ($6.4bn). Short-term, ICL’s growth has been held back as it retrains its entire organization to Microsoft Corp technologies, the fruit of an agreement in 1998 (CI No 3,418) that makes it one of Redmond’s most loyal partners. ICL sees the deal as important to gaining a sizable foothold in the US market, an ambition that, once an IPO has been achieved, can be bolstered by acquisitions.