The market was pleased with what it saw from Microgen Holdings Plc yesterday. The Computer Output on Microfiche specialist has not had much to shout about recently, but shares rose 13 pence, or 7% at news of a 36% hike in annual pre-tax profits. They stood at ú8.4m, on turnover that rose 17% to ú69.0m. Chairman Douglas Lee thought the share price to be a fair reflection of the company’s performance over the period. The year has seen the completion of the company’s bureau rationalisation programme, whereby the number of microfiche bureaux has been cut to nine from 15. Since the year-end another bureau has gone, and chairman Douglas Lee said eight was the minimum with which the company could operate. The company has tried to re-position its operations as ‘services’ – a fine distinction perhaps only understood by marketing people. The memory services division increased turnover by a modest 5% to ú35.5m. It comprises the microfiche part, as well as CD-ROM and on-line retrieval, where the company archives data for its customers to retrieve it. The document services side saw turnover jump 35% for the second year in succession, and Lee thought such an increase is possible again, but profitability might not follow suit, he warned. The division provides volume printing services. The group also reported good growth in sales and profits from its German and Nordic subsidiaries. Capella AB in Sweden recently acquired its rival printing and finishing business in Stockholm, Ljungdahis Mailman AB for ú860,000. Lee said it will produce a modest contribution this year. The dividend will only rise 3.4% to seven and a half pence this time, but Lee said that the dividend cover was now where he wanted it, at two times earnings, and the last two years were unusually high dividends for the level of profits. Lee said the company hoped to be able to raise its dividend while maintaining this level of cover.
