Pegasus Group Plc profits for the 12 months to July 31 slumped 61% to ?655,000 but the company claimed to be taking a higher share of a declining market for accounting software. Following the decision to change the year-end to December 31, the current accounting period will be of 17 months’ duration and new overfull-year figures will be reported in March. The company says the UK market for accounting software has undergone considerable change over the past two years, as the market has matured and hardware prices have fallen, and the company claims it still has a dominant 39% market share by volume in its main market for modular accounting software sold via third party dealers, according to firgures from market researcher Romtec Plc – but demand in this sector fell by 25% in the year to end-July, due largely to first time users moving towards outright purchase of packaged products. Total annual value of this market is put at ?34m at end user prices. Pegasus has therefore entered the packaged product market for first time accounting users, and this market has an estimated annual value of ?12m at end user prices – and Romtec reckons Pegasus has already grabbed a 10% market share. The company has been doing a lot of soul-searching, investigating existing third party products for inclusion in the Pegasus range, and by defining market requirements and preferred development environments, and has come to the conclusion that the next generation of products has to be more flexible; provide the basis of a full management information system; be portable across operating systems; and be less costly to develop and maintain, which is why it has bought rights to the existing accounting product written in Foxpro from Sequel Systems Ltd (CI No 2,046). The company’s existing Senior range has been further developed to create a Version 6 for launch early next month.
Accounts for Windows
The product has added features and an additional module has been developed to cater for new Value-Added Tax reporting requirements that come into effect in January; changes in Pay As You Earn income tax requirements mean that all payroll users will have to be upgraded by April 1993, too. The company has high hopes for its Pegasus Accounts for Windows, which has been further developed, but says that at present the market for Windows accounting products is small. The acquisition of Stockforms on January 32 provided an opportunity to expand the existing Pegasus Forms business profitably and respond to a changing environment in the forms market. Pegasus received ?1.7m in cash on September 25 from Deluxe Corp for 25% of the share capital of Stockforms Ltd, and has completed a joint venture agreement was completed with Deluxe under which the US firm has an option to acquire the other 75%. The Deluxe option is exercisable between August 1993 and December 1994, and on exercise, Deluxe will pay Pegasus cash calculated as 75% of 11 times the net profits of the joint venture during the previous 12 months. Following exercise, Deluxe will pay commissions to Pegasus at the rate of 12.5% of ongoing sales to joint venture customers, for a further five years. The company says that trading conditions are slow, but that the strongest sales period of the year is coming up. Cash balances slipped to ?2.6m at July 31 – before the ?1.7m – from ?3.3m.
