Shares in Learmonth & Burchett Management Systems Plc took a tumble, dropping 60 pence to 163 pence after the company posted disappointing interim results, which reflected failure to land a number of large contracts during the period. The firm, which predicts a better second half, saw pre-tax profits plunge 73.3% to UKP201,000 on turnover that climbed 22.4% to UKP13.1m. The company has been spending lots of money on its marketing activity in the US, where it has been raising the status of LBMS Inc, its Houston, Texas-based operation. US sales now account for 41% of group revenues, up from 23% last time. Australia has seen better results in Sydney, with the company signing some new contracts and putting its head together with Microsoft Corp, Ingres Corp and Gupta Corp on joint sales intitiatives. The firm is also looking to Asia for future expansion and is already developing a network of business partners in that region. Other areas have been pretty poor, though – the UK presents uncertain market conditions, while on the continent, customers have waited until the summer holidays were over before committing themselves, meaning that sales won’t show up until the second half. Learmonth has also spent on product development, although its hasn’t been too extravagant – the firm’s Professional Engineer product was launched in September and although response has been good it hasn’t been quick enough to show up in the interim figures. The company believes that the firm will see the benefits over the next six months. Development costs have been kept within the firm’s 13% limit – 12.6% of turnover went on research and development last half.
The other product which came to market was Systems Engineer 5, the client-server version. This product, which hit the streets in July, is already propelling the company into some client-server consultancy contracts, none of which it will discuss at the moment. Altogether, Learmonth is growing its software business, which increased by 54% to total 64% of group revenue. It is optimistic about the second half, and hopes to post 1993 year-end profits similar to last year’s UKP1.6m figure. To do this it will have to earn a profit before tax of UKP1.4m this period – nearly twice its second-half figure last time.