Birmingham UK-based neural network software company Recognition Systems Group Plc has published its prospectus for a full listing on the London Stock Exchange by way of a placing of 5.4m shares at 70 pence (CI No 2,904). The company sells packaged, simple-to- use neural network modeling products for use by marketing and business managers as opposed to statisticians or computer programmers. It has one set of products that runs on personal computers, and last year developed the products for larger systems, running under Windows NT, Unix, and recently IBM mainframes under MVS. Chairman and co-founder David Bounds said the products are now complete and the company is ready to step up its marketing and sales effort, in the UK and particularly in the US. It is looking to raise around 3.3m British pounds, with which to fund this sales growth. Although both its founders come from the defence sector, Recognition is focusing on the area of customer relationship marketing for its products. Typical customers are large banks, financial institutions, pharmaceutical companies and retailers looking to use data collected about customers to recognize buying patterns and trends and fine-tune direct marketing efforts. Recognition’s Relationship Manager product suite includes Customer Predictor, which finds trends in customer loyalty and analyzes propensity to buy; Demand Forecaster, to predict when they will purchase; Data Builder, which cleans data by estimating and filling in missing data fields, and Customer Viewer to visualize the results. Paul Gregory, the company’s other founder and managing director, says Recognition commissioned research into the potential market for its products, and reckons it to be around 325m pounds over the next four years. He said the market was not ready for its products even two years ago, but with companies focusing more and more on the customer, and having huge amounts of data to analyse, he believes Recognition’s time has come. The company currently employs only five or six sales people in the UK and US, but intends to increase that number to 24 over the next 18 months. As well as selling its products directly, it has formed strategic alliances with statistical software company SPSS Inc in the US (CI No 2,739), AT&T Corp, which is using the software to enhance its call center and has introduced the company to a major pharmaceutical customer, banking back office systems company Broadway & Seymour Inc and last week signed with US database agency R R Donnelly & Sons Co on a revenue sharing deal. Bounds says the company has broken even every year, ploughing profits back into research and development, but it made a loss last year on revenue of just 612,000 pounds. He says there are several large projects in the pipeline, although major revenues from these take some time to come through. He expects very significant revenue growth in the second half of this year, and said the firm should be profitable on a month on month basis by the second half of fiscal 1996-97 – April to September 1997. The placing is sponsored by Albert E Sharp.
