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  1. Technology
February 23, 1993


By CBR Staff Writer

Financial software and services house Sherwood Computer Services Plc is continuing to grow its empire via selective acquisition (CI No 2,004), and has also set up a joint venture company to help it on its way. The Gloucester-based firm has bought London-based Tower Hill Services Ltd for UKP300,000 in cash (CI No 2,112). The company was formerly a subsidiary of the English & American Group Plc and has net assets of UKP1.1m. According to Sherwood chief executive George Matthews, English & American ceased its underwriting activities to focus on core activities. Tower Hill, therefore, had become superfluous, the group was no longer investing in it, and this led to it making UKP160,000 losses for the year to December 31, on turnover of UKP2.6m. Although it made a ‘reasonable’ profit this year, the subsidiary still hadn’t managed to make any new sales, Matthews said. The company provides IBM Corp mainframe and personal computer software as well as programming and consultancy services to the insurance market, both in the UK and overseas. Its main markets, however, are LLoyd’s of London and the London insurance world in general, and its main offerings comprise treasury and cash management software, general ledger, excess-of-loss reinsurance recovery applications, and Explorig, a niche personal computer product to help underwriters explore the risk factor in on- and off-shore oil exploration. Matthews said that the new product range was complementary to Sherwood’s own, and would increase its share of the insurance companies market. While Tower Hill would benefit from economies of scale and investment, Sherwood will gain new skills, a customer base of between 20 and 30 and access to a more international market. Up till now, the company has had no IBM mainframe software offerings, having specialised in Unix. None of Tower Hill’s 30 staff will lose their jobs and managing director Keith Earthrowl will take a seat on the Sherwood board.


The group has also set up a joint venture company, Sherwood International Ltd, with software developer, Beta Computers (Europe) Ltd to acquire the rights to Beta’s Palace. Sherwood acquired its equity by placing new shares for cash. This amounted to UKP225,000 and the firm holds the controlling 51% stake because, according to Matthews, ‘We wanted to be masters of our own destiny’. The joint venture has total net assets of UKP500,000, with the rest coming from Palace. Sherwood International was set up, he said, because Beta wasn’t keen on selling the product outright, believing it to have massive market potential. Also, he said, the product is highly technical and so the group needed Beta’s know-how to implement and support it, while Sherwood’s staff gain technical expertise. Palace has to be customised to meet the needs of individiual life insurance companies, he added – it is too complicated simply to take and install. As a result, Sherwood will be looking to sell various services on the back of it, such as consultancy. It will also put its marketing muscle behind the project. The group is also developing a pensions module to broaden the product’s appeal in the general insurance market. Palace, for pensions and life administration computing environment, is based on Informix Corp’s database. It runs under Unix and provides fast control of high volume data, accurate management reporting, work-flow management, performance analysis, forward planning and historical tracking of transactions. Matthews sees prospects in European and other international markets.

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