At long last, Psion Plc is beginning to show signs of recovery after it was blown wildly off course by its Dacom acquisition. The portable computer, data communications equipment and applications software company saw pre-tax profits jump a massive 3,800% to UKP1.1m at interim stage, on turnover that rose 43.4% to UKP16.5m. The strong increase in sales was attributed primarily to the success of the Series 3 range of handheld computers, launched in November 1991 (CI No 1,760). This has been helped enormously by the completion of the integrated surface-mount assembly line at the group’s factory in Greenford, Middlesex in the first quarter of this year. The additional capacity has brought about an increase in sales levels to 10,000 units a month from approximately 4,000. European language variants, such as software written in various European languages, and the integration of European keyboards, have supplemented the range and broadened the market base accordingly. While in the UK, Psion’s retail division has recovered well despite recessionary conditions, the international division now accounts for some 50% of all computer sales, and by the year-end is expected to total some 70%.
European company
Psion describes itself as a European company and is eager to further its growth here, but nonetheless, has been dabbling in the US. Operations currently exist in New York, New England and California, but Psion claims to be looking more at organic growth than actively increasing geographic coverage. Software and peripherals sales are said to be evolving well and growth in demand is expected to continue into the second half of the year. The losses incurred this time last year at Dacom are reported to have been stemmed, but contribution to profits is expected to remain at about the 15% level. However, Psion’s UK corporate division, which sells customised products to the industrial marketplace, such as the handheld computer ranges, HC and Organiser, saw only weak sales, said to be due in part to the recession and in part to a decline in capital expenditure in the UK. Performance here was quoted as disappointing, given that Psion considers its product range to be strong. Although profits were much improved, the return on sales was said to be below expectations. This increase in trading, however, took its toll on gearing, pushing it up to 37% from 28% at the year-end. Nonetheless chairman David Potter is confident that now the peak seasonal requirements of the summer months are over, borrowings will be reduced by the end of this fiscal year and projected increases in profit in the coming year will contribute to reducing gearing. The outlook for the second half is certainly believed to be positive. A recent original equipment manufacturer agreement signed with Acorn Computers Plc means that Psion is supplying a modified version of its Series 3 to Acorn, which takes the form of Acorn’s new pocketbook (CI No 1,996). This includes specially-developed software for the education sector, where Acorn is broadening its products and diversifying its approaches to the market. And a deal has been clinched with Motorola Inc: the Schaumberg company is to rebadge and sell Psion’s HC range with integral radio modems under the Motorola name, thus opening up further possibilities for Psion in the US marketplace.
