The recent dawn raid by British Aerospace on the shares of Systems Designers International Plc has helped bring forward the public flotation of Admiral Computing Group Plc to next Tuesday, March 17. Back in November (CI No 564), Admiral chairman Clay Brendish said the company he co-founded with Dr Ceri James was looking for a listing around April 1987 but was prepared to wait longer if conditions were not right. Ironically, in view of the recent 30p rise in Systems Designers price caused by the BAe intervention, at the time he cited the collapse of Systems Designers’ share price in October as the sort of reason that might have led to a postponement of Admiral’s public listing beyond April. The Camberley-based bespoke software house is coming to the Full List by way of a placing of 25% of its shares – 2,525,000 – by National Westminster Bank’s County Ltd which at 150p per share will capitalise the company at UKP15.15m. UKP380,000 of the net UKP1.28m being raised for the company – 40% of the total being raised – is earmarked to the relocation and equipping of new premises at Camberley. The remaining money will be added to working capital – Brendish says Admiral has no acquisition plans at the moment. With an entry historic price earnings ratio of 21.4, Admiral compares favourably with other listed software houses such as Logica, CAP Group, Hoskyns, and Systems Designers, all of which, according to brokers County Securities, currently have prospective ratios of between 18 and 22.6. In addition to the four mentioned above, Admiral also competes with British Petroleum’s Scicon, Thorn EMI’s Software Sciences and GEC’s Easams. Its main specialities are software development, technical consultancy and project management of computer related projects in the defence and finance arenas. Defence accounted for around 45% – 75% of that was for the Ministry of Defence – of Admiral’s UKP6.68m turnover in the year to December 31 1986, while finance, boosted by Big Bang, was responsible for 49%. Pre-tax profits for 1986 were up 48% at UKP1.02m on turnover up almost exactly 50%. For 1987, Admiral’s directors are looking to both established sectors and to general government business for growth. The company has also set up a joint venture with High Integrity Systems of Sawbridgeworth, Hertfordshire to investigate possible opportunities from the almost certain adoption of Ada as the standard programming language by the UK Ministry of Defence. Admiral’s financial and management controls look solid and with the bespoke software sector going well since BAe’s swoop on Systems Designers and with major industrials such as BICC and BTR’s Dunlop recently signing up, Admiral looks a reasonable investment despite the disaster stories associated with newly-public companies who spend flotation money on moving premises and despite its comparatively high entry rating.
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