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April 17, 1988

P&P PLC PLACING FOR NEW MONEY SHOULD VALUE THE COMPANY AT UKP45m TO UKP55m

By CBR Staff Writer

P&P Micro Distributors Plc, the Haslingden, Lancashire-based micro hardware and software distributor which has been gearing up for a stock market listing for a year or do now will make its main market debut on April 21. The company – which has just renamed itself P&P Plc – has also made two acquisitions for an undisclosed sum: Bolton, Lancashire-based Broadsword Systems Ltd, an IBM authorised systems centre and the computer-based software and systems company Training International Ltd of London. P&P, set up by two social workers, husband and wife Peter and Pamela Fisher in 1980 – for a long time it was actually called Pete & Pam – says it needs the UKP10m to UKP15m capital to be raised by a placing to eliminate existing borrowings, fund future growth and strengthen the balance sheet. More acquisitions in value added sectors including networking and training are also in the pipeline. A move into the Unix market is also likely. The company has not yet finally fixed a price for the shares, but looks for the flotation to value it at between UKP45m and UKP55m the jumpy market has clearly hurt plans, because two weeks back ago a valuation close to UKP65m was envisaged. For the year to November P&P reported pre-tax profits up 105% at UKP4.3m and turnover up 95% at UKP70.3m. The Fishers – whose business has fared rather better than their marriage, for they parted some time ago – own 80% of the company evenly split between them and the rest is owned by founding partner Chris Gillard. Professor Smith None of the three is now actively involved in the day-to-day running of P&P, which recently appointed BAe Plc chairman Professor Roland Smith non-executive chairman (CI No 878). Peter Fisher is now non-executive deputy chairman and David Southworth, a certified accountant with 14 years of industry experience before joining P&P in July 1986, is now group managing director. Much of the cash raised will be new money because the founders do not plan to reduce their stake substantially. Direct sales to large accounts make up 30% of turnover and distribution, sales and support through computer dealers account for 70% of turnover. Next week P&P is launching an Apple computers division to target the corporate sector which has recently taken to the Apple Macintosh. It employs 217 staff out of three offices, eight Birmingham, 45 in London, and 164 at the Haslingden. Its acquisitions employ about 25 staff each and its aim in acquisitions is to buy expertise rather than market share. Overall hardware sales accounted for 40% of turnover and printers, software and peripherals 20% each. About 27% of 1987 turnover came from IBM hardware and software sales; 12% from Amstrad PC sales; 16% from sales of Epson printers; Microsoft, Lotus and other software and peripherals makers contributed around 4% each. P&P seems very aware of the poor stock market performance of computer distributors and to stress that it is not just another boxshifter, marketing manager Stephen Brooker says We are into adding value to the boxes and selling solutions. Our philosophy is to match prices if necessary but not to lead on price: we want to be the number one microcomputer company in the UK – to us that doesn’t mean being the biggest but the most profitable. J Henry Schroder Wagg is the banker, Hoare Govett as broker; dealing is due to start April 28.

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