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July 19, 1990


By CBR Staff Writer

Computer distributor and services group P&P Plc celebrated healthy interim results by announcing a three-for-eight rights issue to raise just under UKP27m. The group saw pre-tax profit up 36% to a little under UKP7m on turnover up 37% to more than UKP109m. Chairman Roland Smith said that sales to large corporates had increased, and that Principal Distribution which distributes Apple third party products had an exceptional first half. Under the terms of the rights issue 15m new shares will be issued at 185 pence. Existing shareholders will be offered three new shares for every eight shares held. Peter Fisher, Pam Fisher and Chris Gillard, who together own 43.5% of P&P’s equity, not surprisingly will not be taking up their rights in full, and their combined holding will be diluted to 32.3%. According to marketing director Steve Brooker, the reasons for the issue are to increase the market capitalisation so that the group tops the magic UKP100m mark; to reduce borrowings to zero; to finance an acquisition programme (P&P has promised not to go to the City to raise extra cash for two years); and to set up a Digital Business within Power Systems (P&P’s Perrin acquisition). The Digital Business – P&P believes that has been accredited as a DEC value added wholesaler – will be grown using workstation distribution skills acquired with Perrin. On the corporate side the business will take a softly, softly approach, but has already been asked to supply DEC products by users that would rather deal with P&P than with rival DEC Wholesalers. The group thinks the future is looking bright because the US distribution threat from Businessland has receded and because P&P is now increasingly operating in high margin businesses such as maintenance, rentals, training and consultancy. On the acquisition front the group is tar geting Sweden, where there is low personal computer penetration, Spain and Portugal, where a hungry market is emerging, and France, where a considerable amount of consolidation is going on following the collapse of Asystel. Indeed, Brooker believes that P&P will make its mark in France in the next six months. He says that despite the group’s deal with Acer, it does not really need Altos products among its Unix offerings. It does, however, relish the desire to become an RS/6000 peddler and believes that this IBM machine may take it into new markets faster than the company had believed possible.

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