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Six months ago the Headland Group Plc of Godalming, Surrey looked in danger of becoming an also-ran to Misys Plc in an acquisition competition for software companies. But that was six months ago, and not only has Headland now announced some buoyant interims with pre-tax profits up 118% to UKP351,000 on turnover up 53% to over UKP5m, it has also agreed to buy Multisoft Plc for UKP11m, and outlined a serious plan for future growth. The acquisition is a cash and shares offer with a UKP2.5m cash component, UKP4.25m by the issue of 8.8m of ordinary shares, 3.8m to be placed immediately by the vendors to raise another UKP1.6m for themselves; the remaining UKP4.25m is to come from 4.25m Headland convertible preference shares in Headland. For the last financial year to March 1989, Multisoft did UKP5.6m in sales, producing UKP1.05m in pre-tax profit, but is looking for nearly UKP11m turnover in the current year. Multisoft specialises in the development of business accountancy software packages from which it derives 65% of turnover against competition from its closest rival Tetra. Its main packages are: Multisoft Premier for large Unix-based users and Multisoft Standard for the middle market MS-DOS-based user. It also provides turnkey hardware and software systems in the retail, manufacturing, construction and wholesale markets. The acquisition marks a detailed statement of direction for Headland under which a new division specialising in business accountancy software has been set up.

OS/2, Pick dead ducks

Within this division, which is to be led by Tony Nicholls, chairman of Multisoft, will be Multisoft, Mega (acquired last year) and Compsoft. The combined efforts of this division will at present give Headland sales of UKP15m a year in accounting software making it, according to chief executive Nicholas Birtles, the biggest such company in the UK market. Headland is looking to cover the business accounting software market from personal computer to mainframe. To this end Birtles said the company will support the following MS-DOS, Unix, DEC VMS and IBM’s Systems Application Architecture. He added that Headland was not interested in either Pick or OS/2 which he considers to be akin to dead ducks. The horizontal accounting market will now be the core of Headland’s business, and it distanced itself from what it termed the unfocussed, vertical Unix markets in which Misys is to be found. To emphasise its new focussed horizontal direction Headland said that the past six months have already been spent putting Mega’s Miracle accounting package on the VAX. In the short term, Headland is searching for suitable acquisitions in the UK, but in the long term it wants a strong presence via acquisition in the continent. In particular, it looks forward to the climate to follow the introduction of new accounting standards throughout Europe in 1992. Birtles said Headland looked to have at least 20% of the UK business accountancy market in five years, and a significant proportion of the world market. As regards the rest of Headland’s business, consultancy and software services from Wootton Jeffreys are said to have produced modest growth, while the original Compsoft business is said to have improved the quality of its earnings. All in all Headland’s prospects appear good now that a tangible plan for growth is in place.

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CBR Staff Writer

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