In a bid to plug what it sees as the last remaining gap in its field, Sherwood Computer Services Plc formally announced a move into the commercial and personal lines insurance business with CIRIS, an Oracle-based product from Infoel SA that it distributes in the UK. The company actually won its first customer for the system back in June, which is designed for underwriters in the fields of home, motor, engineering and general aviation insurance, among others. But it was unable to name the customer just yet. It is just as well that Sherwood is finding new niches, given that its largest market, Lloyd’s of London is dormant and has been overtaken by the life and pensions sector as the company’s biggest area. Pre-tax profits for the six months to June 30 were ú615,000, against ú88,000 losses last time. Turnover fell 8% to ú11.0m, but this drop was entirely due to discontinued businesses, said finance director Steve Bellamy. Sherwood shares were down seven pence at 173 pence at the news. Having acquired and integrated Beta Computers (Europe) Ltd in the half (CI No 2,614), Sherwood now owns the AMARTA tool set and development environment, which it sells into the life and pensions market. It signed Scottish Equitable International SA and a Thai insurance company during the half. The actuarial product, ACT3 was also bought by Scottish Equitable. Investment in AMARTA continues while a graphical user interface is added. The Epsilon electronic placing system won five customers during the half as brokers got ready to deal electronically, which will be mandatory as from the start of 1996.
Execution-only stockbroker
However, there is little prospect of brokers snapping up Epsilon in a last minute panic, as chief execuitve George Matthews admmitted there was only one broker left in London yet to decide on what software to use. The investment sector is the fastest growing for Sherwood with the rapidly-expanding City Deal Ltd, the execution-only stockbroker in which it holds an 80% stake. City Deal will launch its Infotrade service in October to enable users to deal in shares electronically, though Bellamy stressed that we haven’t done anything like Sharelink’s failed Internet service (CI No 2,746), which had to be aborted when the Stock Exchange pulled the plug two days ago. Apricot Computers Ltd, the personal computer division of Mitsubishi Electric Corp will bundle the City Deal share dealing and portfolio management software on its machines. Sherwood also launched City Deal Direct in the half, whereby customers can talk directly to dealers, which the company hopes will encourage more regular dealing. City Deal has added third party clients at the rate of one a month and now has 20. The facilities management business of Sherwood has been transferred to the Sherwood-CFM joint venture and Sherwood has closed its data centres in Romford, Essex and Gloucester. It expects to see the benefits of the venture filtering through in the second half. Property management was tight in the half, with 10,500 square feet shed in Romford and the avoidance of what the company claimed was ú200,000 in dilapidation costs in the year. Offices in London and Gloucester have been sub-let, further reducing the cost base. The company had net cash of ú39,000 at the half-way stage, compared with net debt of ú1.9m a year ago. Net assets fell 13%, but Bellamy said this was due to a goodwill write-off from the Beta acquisition. He described earnings per share starting to show some semblance of normality at 6p, and added that it remains on target for pre-tax profits of around ú2.1m in the year as margins improve with the cost base management. An interim of 1.25 pence is recommended, compared with no dividend 12 months ago.
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