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March 22, 1987

MICRO BUSINESS SYSTEMS FACES SUBSTANTIAL CHARGES ON IRISH VENTURES

By CBR Staff Writer

Micro Business Systems Plc is set to take a write-off believed to approach UKP500,000, on its Irish operations following a meeting, due today, of creditors of Manufacturing Management Systems Ltd, a Dublin-based company in which MBS Plc has a 40% stake. MBS says it asked the private individuals who hold the other 60% of the company for permission to wind MMS up late last year but only after it took legal action in December was it given the go-ahead. John McStay of Ernst & Whinney in Dublin has been approached to act as liquidator and he is likely to receive an offer in the near future from MBS Rentals Ireland, currently jointly owned by MMS and MBS, for the assets of MMS. The costs to Micro Business Systems Plc of sorting out the shambles are likely to include writing off its investment in the bankrupt company, and of buying out the MMS interest in the joint venture and whatever assets remain for the benefit of other creditors – the assets include MBS Rentals Belfast, which confusingly is a wholly-owned subsidiary of MMS. MMS was primarily a software house but it also sold and maintained micros throughout Ireland. It employs 20 people but no details of its turnover are available. It is still not clear whether MBS will take the write-offs and costs of this peculiarly Irish adventure as exceptional or extraordinary items – it declines to give any indication of the sums involved, nor whether they will be included with the 1986 results, announcement of which has been put back a week to April 13. Its shares at 111 pence – up 11p by Friday’s close – are currently trading at something like 70 times anticipated 1986 earnings, which are tipped to come out at approaching UKP1m at the pre-tax level, in expectation of sharp improvement this year, when analysts are looking for upwards of UKP5m pre-tax.

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