Gloucester-based Sherwood Computer Services Plc, the software and services company that now focuses primarily on the local government and financial services sectors, hopes soon to have some news on the acquisition front, having made it clear some time ago that it has cash to spend. The board says it is looking for businesses that will complement its core activities, as well as enabling Sherwood to diversify into new vertical sectors. At December 31, the company’s year end, Sherwood boasted #3m net assets, #2.3m cash. The company describes 1991 as a record year in terms of profits – pre-tax earnings were up 23% at #2.4m, while revenues slid 9% to #22.6m. Turnover figures, however, reflect the disposal of non-core activities, and the exclusion of revenue from the disaster recovery business which Sherwood happily passed on to ICL Plc a year ago, under a joint venture agreement where ICL owns 75% of the combined activity, Guardian, and is responsible for ploughing into it any necessary investment, while Sherwood sits back with its 25% stake and reaps the occasional profit – it has so far seen #250,000 in consultancy revenues from the project, which it describes as highly successful. Sherwood claims not to be especially vulnerable to the recession, though it has found it a tough struggle to cope with that and the floundering Lloyd’s of London market. On the other hand, Sherwood claims the ailing Lloyd’s market has in some respects provided an opportunity: it has been able to push its open systems products, arguing that what Lloyd’s underwriters need is a more efficient computer system. Moreover, it isn’t overtly concerned about the outcome of the general election: where software houses that had systems designed specifically for the administration of the poll tax and are subsequently affected by its collapse, Sherwood’s products are not tied to legislation – the board is confident that both Labour and the Conservatives are committed to local government and housing. Sherwood’s headcount is currently around the 354 mark, some 30 fewer than a year ago, and half that of three years ago. Research and development spend was higher than average at #2.6m in 1991, but is expected to shrink back to around #2.1m in the current year. Sherwood does not fear the future – having significantly reduced its cost base, the group is financially sound, innovative and totally committed to quality, says the board.
