Macro 4 Plc has announced its results for the year to June 30 with turnover up by 5.5% to UKP19.02m, pre-tax profits up by 14.4% to UKP8.75m and net profits down to UKP1.9m from UKP2.7m last time. The company is proposing a 5 pence per share special dividend, taking the total for the year to 17.75 pence. This represents a 61.4% increase on last year’s figure and Macro says this is due to the cash-generative nature of its business. The company operates from headquarters in Crawley, and it is in a better position than many mainframe software houses since it rents rather than sells its portfolio, thus ensuring a more reliable revenue stream. Almost 80% of turnover comes from overseas operations, and although the US dollar’s erratic behaviour has had a material impact, 31% of the total originated in the US, with 40% coming from continental Europe. The company says that had there been no variation in in the dollar rate since the begining of the year, group turnover would have been nearer UKP20m and pre-tax profits should have improved by a further UKP550,000. Macro complains of difficult trading conditions in its major markets, saying that economic recovery, in the UK and elsewhere, remains illusory. Nonetheless, overseas subsidiaries have improved in terms of turnover and contribution to profits with Macro Inc producing its best performance for several years. France, Italy and Switzerland are said to have performed strongly, and although Macro GmbH has been affected by uncertainty, it improved on the previous year. Macro established a Benelux subsidiary in April with offices in Belgium and Holland, and it paid UKP100,000 in cash its the former agent for the customer base and associated revenue stream. Agent-run territories have proved disappointing, but the Japanese agent increased royalty payments by 36% and Macro netted some UKP200,000 in royalties from its distribution network. Additional agencies have been established in Venezuela, Chile, Argentina and Brazil. In terms of technology, the ratio between VSE and MVS users has changed over the 12 months, now about 55% to 45%, and the company attributes this to an increase in downsizing rather than a fundamental shift between the two systems. Revenues from the three mainframe systems – VSE, MVS and VM – were 44%, 24% and 32% respectively. Macro 4 has diversified into mid-range systems with a product for the AS/400 market and it expects to launch one other by the year-end, taking its portfolio up to 33. The company is cautious about future prospects, saying that the long-expected economic revival is slower and more painful than anticipated. However, rental income buffers it from all but the most extreme downturns – customers that go bust don’t pay whatever the contract says, and it forecasts better than nominal profit growth in 1993.
