London Bridge Software Holdings Plc, a small UK software company with a unique range of credit management software, is going to the market to fund its bid for expansion into the US and Far East. The star product central to the company’s future is an application called Debt Manager. Debt Manager is a relational database product used to support complex debt management for large institutions. It manages early arrears of debt through to recoveries and asset repossession. The software runs on IBM Corp mainframes and AS/400s, together with Unix systems running the Oracle database. Where the program really differentiates itself is in its ability to cross-manage problem debts from customers that have multiple accounts. A good example of this would be the collection of credit card debts where the customer also has a mortgage with the same bank. The bank’s exposure to bad debt may be mitigated by the value of charges it holds over the customer’s property. Debt Manager ensures that time and money is not wasted in instigating court proceeding for the recovery of the arrears on the credit card. This cross management feature can also appeal to utility companies who provide the same customer with multiple services. Chairman and managing director Gordon Crawford’s claims about the usefulness of Debt Manager are backed up his client base. All four UK high street clearing banks now use the product, together with Scottish Power Plc and United Utilities Plc. London Bridge Software was created by Crawford in 1987. With UK sales more than doubling since 1995 to 6.3m pounds on which it did 2.5m pounds pre-tax, and strong interest from some major US banks, the company’s brokers have had no trouble in placing the 6m ordinary shares on offer, just over half of them new, at 200p. Crawford, who will own 74.5% of the company after flotation, now wants to take his brand of credit management to the US market and the Far East. He laid out his formula for growth around three key factors. The company will employ only the best employees, it will steer clear of any involvement with fixed-price contracts and it will endeavor to remain cash-generative throughout.
Lucrative new market
In October, the firm acquired a division of the North Carolina company First Data Resources Inc which sells a debt recovery system called Recovery 2000. Crawford now has access to a client base of some 35 US companies. This gives him the means to introduce the group’s other products into this lucrative new market. While the company is talking to six US customers at present, there have not been any confirmed sales of Debt Manager in the US. Crawford is hopeful that US companies will be much more inclined to sign up once his company has achieved listed status. Big US companies don’t like depending on strategic software from privately-owned outfits that are not publicly accountable, he said. The company was keeping trading results for the first quarter of 1997 very close to its chest but it expects to release some limited results directly after flotation. The flotation will raise 6.4m pounds new money for the company, which will be capitalised at 47m pounds at the issue price, Henderson Crosthwaite Institutional Brokers Ltd is doing the business with Deloitte & Touche Corporate Finance as the sponsor. If the market perceives Debt Manager to be as useful as it appears to be, expect some very lively trading in London Bridge Software Holdings Plc on March 20, the first day of dealings.
