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  1. Technology
May 17, 1988


By CBR Staff Writer

Sanderson Electronics Plc, the Sheffield systems group that specialises in the Pick operating system is looking to raise UKP1.7m of new money net of expenses through a placing on the Unlisted Securities Market. The company is placing 2.4m ordinary 5p shares – 28.6% of the enlarged equity – at 130 pence, valuing the company at UKP10.9m. Sanderson Computers is the principal trading subsidiary within the group and distributes hardware products under its own name and under the original manufacturer’s name. The computers distributed under the Sanderson name are supplied by CIE Systems, the computer arm of Japanese trading giant C Itoh & Co, and models are availbale that can support up to 250 users. Sanderson also markets its own PICS software which comprises a range of modules designed to control particular aspects of business computing, including financial ledgers, payroll, stock control, order processing, manufacturing control and other specific industry requirements. Markets include manufacturing – particularly the printing industry – local government and the National Health Service. Group chairman Paul Thompson stressed that they were well ahead in their preparations for a Community Charge system for local authorities and hoped to secure a number of orders. The company acquired for cash a 51% interest in Insight, a specialist computer terminal manufacturer in October 1986 and in January of this year acquired for cash a 70% interest in Cotswold, a Bristol-based computer systems supplier. The management of Cotswold organised a buyout from the previous parent company in October last year with finance provided principally by 3i Plc. The company has seen turnover grow from UKP111,000 in its start up year to UKP5.1m in 1987, with pre-tax profits reaching UKP380,000. The 1987 figures represented an 82% increase in turnover and 66% in pre-tax profits. Astronomic The profit record is a nice clean curve, moving from a UKP10,000 loss in 1983 to UKP102,000 profit in 1984, UKP150,000 in 1985 and UKP229,000 in 1986. It employs 115 people and claims to have cornered approximately 4% of the estimated UKP200m UK market for systems running Pick. Stockbrokers CL-Alexanders Laing & Cruickshank said that dealings in the shares are due to begin next Monday, May 23. The directors have forecast that the group’s profit before taxation and minority interests for the year to September 30 1988 will be not less than UKP1.45m, an increase of 282% on last year’s figure, with an estimated earnings per share of 10.9p putting the company on a prospective price earnings ratio of 11.9. That sounds undemanding, but the figures in the prospectus indicate that on an historic basis, which at this stage is all anyone can go on with complete comfidence, the company is coming on an astronomic multiple of 48 times 1987 earnings – and that is assuming that the per share figure in the prospectus is adjusted to take account of the additional shares to be issued this week. That forecast had better come good or there will be trouble – but investors can take a little bit of comfort from the fact that the London market now has its own little Pick sector, since Electronic Data Processing Plc, like Sanderson, is a pure Pick play, while UCL Group Plc, although diversifying, is primarily a Pick play – and both have performed well.

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