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February 10, 1987

RESEARCH MACHINES HEADS FOR UNLISTED SECURITIES MARKET – IN 1990

By CBR Staff Writer

Research Machines Ltd’s managing director Mike Fischer hopes that the company he co-founded in 1977 will go on to the London Unlisted Securities Market in 1990, by which time its business will be more evenly split between its traditional educational base, and the business and commercial sector which the 80386-based machine is aimed at. The Nimbus X Series (details front page) and the enhanced 8-bit Nimbus PC, which now has an emulation package for the BBC’s Acorn educational box, are part of a plan to take the leading share in schools. Science and education accounted for 70% of Research’s UKP16.3m turnover last year, representing a 25% market share. This year the company is looking to add another 20 to 40 local education authorities to the 28 it already has using the Nimbus range. With RM Net, the company’s networking package, the company says that 75% of its 40,000 installed workstations are networked and that that trend will continue with the X Series. Fischer hopes the 80386 and 80286-based machines will pick up business in the commercial and Government sector – the UK Army’s Land Forces and the Royal Navy already have networked Nimbus PCs and Research Machines has announced an unnamed multi-million pound OEM venture with a multinational company to produce a customised version of the X Series. Government contracts, Fischer forecasts, will materialise in 1988 and 1989 and the UK Government’s Central Computer and Telecommunications Agency has shown interest in the new range. Research Machines has ambitions abroad, too: a Scandinavian contract is in the pipeline worth several million pounds and Fischer isn’t reluctant to talk to European PTTs and educational bodies with an eye to signing up distributors, or to negotiate design licences. Last year exports generated just UKP500,000 of business, forecast to be UKP1m this year rising to UKP3m to UKP5m in 1988. Total turnover, up 45% to UKP16.3m in 1986, is forecast at UKP22m this fiscal year to September 30. The X Series, available in full production from June, is expected to make sales of 7,000 to 10,000 between then and December. From now until the year-end Research Machines is looking to appoint 35 value-added resellers and systems houses to work on application development in graphics and networking, adding to the 15 it has already appointed. Fischer hopes the X Series will boost non-educational sales from 12% last year to 30% in 1987, with Value-Added Resellers and systems houses developing industry-specific software for the range. Research Machines will continue to compete in the educational market, he says, by offering 25% to 35% discounts and selling direct to schools, colleges and universities – 90% of its business is in direct sales. If, and when, it does go public, employees will be able to exercise a share option, around 20% of the equity; two co-founders hold 25% each and venture capitalists CitiCorp and Abingworth 30% between them.

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