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December 8, 1987

SPARKLING LEARMONTH & BURCHETT LOOKS FOR ACQUISITIONS OF PEOPLE, PRODUCTS

By CBR Staff Writer

Joint managing director Roger Learmonth was in buoyant mood as he unveiled Learmonth and Burchett Management Systems Plc’s first results since it joined the Unlisted Securites Market in June (CI No 705). Turnover of the methods and software consultancy was up 64% at the half way stage, at UKP4.77m, with pre-tax profits lagging only a little behind despite the costs of setting up a separate sales and marketing department. The department now has six people, all dedicated to winning new accounts. Rewards from the move have already started to appear and should translate into the bottom line in the second half. Learmonth says that LBMS could have continued its rapid growth for the time being without a sales department, but there would have come a point at which expansion would have been hampered without sales specialists. Production people do the real business, according to Learmonth. In other words, the real money comes from repeat customers. Prospects continue to look good. New releases of LBMS’ computer-aided software engineering tool Auto-Mate Plus, a competitor to James Martin Associates’ Accelerator and Arthur Young’s Information Engineering Workbench, and life cycle software tool Leap SM are due early next year. A new code generator interface makes its public debut at an unnamed major customer this week. A reverse computeraided software engineering tool that documents existing programs is also in the pipeline. This could be very exciting as maintenance of old, poorly written spaghetti code takes up too much time and expense in every computer installation in existence. Deals with ICL, Philips, Honeywell, Software AG and Oracle, similar to that signed earlier in the year with Cullinet, are under negotiation. Prudent hedging by finance director Chris Fawcett has ensured a rate of $1.578 throughout the second half. Second half profits will therefore be unaffected by the dollar weakness despite the US accounting for 35% of turnover. With UKP750,000 in the bank, growth may be further fuelled by acquisitions. Roger Learmonth says LBMS is looking to buy skilled people, new products or organisations that are strong in training or methods. Certainly a firm to watch if the market shows further signs of stabilising. The second half is traditionally the stronger and the order book is well ahead of 1986.

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