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August 22, 1988

SOFTWARE LTD SEES UKP45m THIS YEAR AFTER NORBAIN DEAL; NORBAIN TO CUT DEBT

By CBR Staff Writer

John Nicol, chairman of Norbain Electronics Plc, says the UKP3.5m cash raised from the sale of its micro and micro peripherals distribution businesses – Norbain Micro and Norbain Data (CI No 998), which lost UKP373,000 on sales of UKP15.2m last year – to Software Ltd will go to repay borrowings and provide a base for the expansion of the remaining business. He expects to raise a further UKP650,000 from the sale of one of its buildings which is now surplus to requirements. The sale follows disappointing pre-tax profits for the Reading company of UKP10,000 on a turnover of UKP24.6m for the year ending April 30. Norbain will now concentrate on its security division, Norbain Imaging, which has signed franchises with Hitachi, Molynx, British Telecom and Philips; its recently relaunched micro third party maintenance arm Nationwide Systems Engineering; and its components distribution unit.

Software Ltd, which moved to the Elepahant & Castle in South London last January, claims the acquisition places it amongst the four largest distributors in the UK. It was established in 1983 with backing from 3i Plc, NatWest’s County Bank and the Quester Group, and raised UKP750,000 in a second round of funding in 1985 from the first two sources (CI No 301). The hardware distribution arm was established in March last year and has concentrated on Zenith, Panasonic and Digital Communications Associates Inc equipment. It has now gained Brother, Canon, Citizen, Epson, Fujitsu, Hitachi and Roland franchises as a result of the acquisition and the number of employees has doubled to over 100. A company spokesman said it would have taken two to three years of organic growth to reach its present position. The deal was financed by a number of City institutions including old backers 3i Plc and County NatWest and Software Ltd says it expects the new business to increase turnover to between UKP42m to UKP50m in the first year of the agreement, with a projected profit of UKP3m. Software Ltd is privately-held, but admitted long term plans to go public.

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