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November 18, 1993

MARKET CONDITIONS, WEAK PERFORMANCE MAKE ICL PUT BACK DATE FOR FLOTATION

By CBR Staff Writer

ICL Plc has delayed its mid 1990s target for flotation by a few years, according to Richard Livesey-Haworth, group executive director, who declined to give any further details about the company’s plans to go public at its six monthly company update. The company’s revenues are climbing and in 1992 it had a 9.3% share of the UK market, compared with 12.7% for IBM UK, the company ICL has as its target. In 1991, the respective figures were 14.1% for IBM and 8.7% for ICL, so by virtue of a concurrent IBM market share decline ICL will be assisted in reaching its target. The firm was cagey about giving precise indications of expected profits for the year, saying only that they would be down on 1992; and that at the half the company was profitable and revenue was up 6%. ICL has seen a shift in its business focus from hardware towards software and services activity of about 2% a year with over half its turnover now coming from this area, a shift it is encouraging. It recently signed contracts with British Gas Plc, a services only agreement worth UKP5m over five years and with American Airlines via its Sorbus joint venture, to maintain and support 250,000 personal computers worldwide outside the US. The company has been building strength in the vertical market. In particular in travel and transport sector, now a UKP50m business, providing check-in systems to the SAS airline and expert systems to Cathay Pacific used for rostering, among other contracts. Growth in the retail segment remains fragile, although turnover is still expected to be in excess of UKP400m in 1993. Finanacial services, too, remain a key sector with ICL providing the First National Bank of South Africa with cheque and credit card security vetting technology. As far as strategy goes, ICL is continuing its expansion into continental Europe which now contributes greater turnover than the UK. In European public administration systems the firm is market leader in Spain and the Netherlands. With the establishment of a client-server division in June, ICL is concentrating on this business area. The agreement earlier this month with IBM to make the ICL Search Accelerator technology available for the RS/6000 underpins ICL’s plan to supply products based on open system standards. Client-server systems now contribute revenue of UKP1,000m per year. Given its financial situation, the company says it plans to manage its development at a sensible speed to ensure a steady long term growth and does not seem preoccupied with the precise details of 1993 profitability.

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