London-based Psion Plc has reported its results for the period ending June 30, the first to include a contribution from Dacom Systems, which it acquired in January. The company achieved a turnover of UKP14.2m, up 76% from the same period last year, pre-tax profit rose by 58% to UKP1.63m, and earnings per share increased by 40% to 5.25 pence. Approximately 50% of the growth in turnover came from Dacom Systems, and the rest was organic. The company has previously stated that it would prefer to grow organically rather than by acquisition, and while it maintains this position, it does foresee some European acquisitions in the medium to long term future. Psion GmbH has still to achieve profitability, although chairman Dr David Potter says that the German subsidiary did see good sales and development, with 50% growth, against 42% last year. Psion’s share price has rocketed over the past two months, and is rated at 29 times prospective earnings for the year to December. Dr Potter claims this is partly due to a wider institutional awareness of Psion, and partly due to the feeding frenzy of analysts who have over-reacted to rumours of new products. He claims that the share price has not placed the company under undue pressure, but he would like to see a more stable environment. The City seems to go along with this, and following his meeting with analysts, Psion’s share price was down 13 pence. Keith Woolcock, analyst with CIBC Grenfell-Colgrave, echoes Dr Potter’s sentiments. He believes that Psion’s rating is a dream one, based on City optimism and exaggerated projections for the new laptop due out at the end of this month. Dr Potter is sanguine about the fact that the booksize laptop market is becoming highly competitive because he believes Psion’s product has one or two edges over the competition, notably longer battery life. He dismisses Atari Corp as a video games company that should stick at what it is good at – and video games are something he knows all about since that is where Psion started out, and is even more dismissive of Fujitsu Ltd-backed Poqet Computer Corp. On the Psion shares, Keith Woolcock advocates caution, and cites the Herculean task that every UK company has to face, that of competing with Japanese and US corporations with worldwide resources at their disposal. Woolcock is also concerned that 50% of Psion’s growth came from Dacom. Up to 40% of Dacom’s turnover is based on supplying other manufacturers with modems, which is a potentially volatile situation, and puts pressure on the margins. Psion was unable to give a breakdown of the unit number of Psion Organisers sold over the last six months, but quoted a sum total of roughly 400,000. And demonstrating that it has no intention of being seen as a one-product company for ever, it has also been working with a number of UK radio paging companies to develop a paging device, and expects to have a product to announce by year-end.
