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NORSK DATA LOOKS TO UK MARKET TO REDUCE ITS DANGEROUS DEPENDENCE ON NORWAY

Following the company’s disappointing half-year results issued last month – net losses of $17.7m after 14 years of solid growth (CI No 994) – sources within Norsk Data A/S indicate that the company is now looking to the UK operation to help ease its difficulties. Problems for the Norwegian company are primarily home-based, where the losses occurred, in contrast to a 17% increase in overseas activities. Turnover in Norway was down 7% due to a sharp fall in demand for computer systems in the oil dependent market. The feeling within the group is that no matter what happens to the home economy Norsk cannot return to the situation where tiny Norway accounts for 60% of its turnover, as was the case up to a few years ago. The company does have a UKP200m cashpile and has invested between UKP30m and UKP40m in the UK in the last 12 months in an attempt to widen its customer base. This included the UKP16m acquisition of Wordplex Information Systems Plc last year (CI No 716), and the Wordplex managing director, Steve Bennett, now heads Norsk Data’s UK operations. The company’s strategy is to concentrate on four vertical markets: computer integrated manufacturing, local government, printing systems and finance. Over 90% of the group’s activities are focussed on five north European markets: Norway, Sweden, Denmark, West Germany and the UK. Norsk intends to push hard in the UKP1,500m UK financial systems market, where Word plex was quite strong. UK activities are expected to be responsible for about UKP40m of the group’s total turnover this year, against UKP25m from Wordplex and UKP10m from Norsk Data last time, an increase of UKP5m primarily due to growth from a number of merged prod ucts. All of Wordplex’s overseas operations outside of the five niche markets, including its second bigg est operation Australia, have been divested with the exception of Spain, in which it is considering furth er investment for possible expansion. The group is forecasting a better second half than it recorded last year, when it saw a profit of UKP9m, and it has no intention of eating the seedcorn: it will continue to invest 12% of turnover in research and development.

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