There had to be reason for MMT Computing Plc hoarding so much cash, and one reason may now have been revealed. The London-based software and consultancy company intends to buy back the 45% of its South East subsidiary, also based in London, that it does not already own, which managing director Mike Tilbrook expects to be earnings enhancing. The company will pay around ú1.5m for the stake, in two tranches, although Tilbrook said the majority of this would be in shares, which the current holders of the equity apparently prefer to cash. MMT shares were off 12 pence at 208 pence yesterday, after an early sixpence rise. Cash balances at the year-end on August 31 were ú6.2m, up from ú4.7m a year before. Usually Tilbrook has good words for one of the subsidiaries while chastising the other (CI No 2662), but not this time. Both are praised for their outstanding performances, which contributed around 95% of the earnings, if the gross profit figure is used as a comparison. The remainder comes from the company’s 5.3% stake in Sherwood Computer Services Plc, which yielded a ú198,202 minority interest in the last financial year. Overall, pre-tax profits at MMT for the year were up 23% to ú3.1m, on turnover that rose 29% to 14.0m. Recruitment is at the forefront of Tilbrook’s mind at the moment, as the company attempts to gain expertise in IBM Corp’s Lotus Notes, Powersoft Corp’s PowerBuilder and Seer Technology Inc’s HPS High Productivity System software engineering tool. People with Notes expertise are apparently very difficult to find at the moment, according to Tilbrook. But agreements have been reached with some of MMT’s major clients to train the company’s staff in PowerBuilder and High Productivity System, and then subsequently take them on as consultants. Tilbrook warns that this training effort will result in a substantial six figure investment, most of which will be charged against the current financial year’s figures. Tilbrook and the board view the company’s prospects with the unusual standpoint of controlled confidence, but welcomed the opportunity to recommend a final dividend of 4.4 pence per share, which makes a total for the year of 6.2 pence, a 19% increase on the 12 month ago figure.
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