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November 15, 1993

TADPOLE ACHIEVES UKP749,000 PROFIT IN ITS MAIDEN FULL-YEAR REPORT; POWERPC PREVIEW

By CBR Staff Writer

Tadpole Technology Plc, the Cambridge, UK manufacturer of RISC-based notebook computers and system boards has turned in pre-tax profits for the year of UKP749,000, and says that it expects to raise additional capital during 1994 to fund sustained growth. In the last four years it has only been profitable once before – in the nine months to September 1991, but now, with both its Sparcbook portables, and its traditional OEM board business doing well, the company seems on a roll. It is saying nothing yet about the timing, magnitude or method of the capital-raising exercises. Chairman Richard King says that the cash and facilities available are sufficient for the next year, and that and that he expects to attract investment from both from both existing and new shareholders. The proposed US listing is still on track, but group chief executive George Grey was unable to say whether US investors would see a separate share issue, or whether the existing stock would be traded in the new market. The company currently has just over UKP1m to hand and in the bank, where last year it had UKP360,000. Next cash outflow on operating activities is up to UKP904,000 from UKP362,000. Though Sparcbook sales have done well, Tadpole says the results would have been even better, if it weren’t for problems getting hold of enough 500Mb disks. The 500Mb Sparcbook 2 was due for launch at the beginning of the year, but its un-named disk supplier failed to deliver and in the event the machines did not get to market until the middle of the year. Whoever it was that let the company down has now been junked in favour of Toshiba Corp, says Grey, and now the vast majority of Sparcbook 2s that ship are 500Mb models. Next year should see another revenue stream open on the notebook side when IBM Corp begins to ship the PowerPC-based portables that Tadpole is designing. The machine is being displayed at this week’s Comdex, though it has yet to be officially announced by IBM.

Manufacturing in the US

There is no word on when it will be launched, but Grey says that it should be early enough to contribute materially to next year’s figures. Meanwhile the OEM board side did better than expected, as unexpected sales came in for the company’s older products. In particular the deal with the undisclosed multinational helped things along (CI No 2,125). It was reportedly worth UKP1m over 18 months to two years. The fact remains however that there has been something of a hiatus in the flow of new products to the OEM side of the business, but this is being fixed, and the new TP 91 Sparc-based embedded controller board is promising, says Grey, but overall the OEM business is expected to remain flat though 1994, before the new products kick in in 1995. The US decision to drop its protectionist tariffs on LCD displays has tempted Tadpole to reintroduce manufacturing in the US, and early in 1994 the company’s’ old facility in Austin, Texas will begin assembling machines destined for the US and Far East. Board assembly will remain in the existing UK plants, but the company is taking on ICL Plc as a subcontractor in the manufacture of some Tadpole products. Although growth is expected, chairman King saw fit to temper his statement with a note of uncertainty over exactly when it would happen, saying while we expect substantial growth for the company, both the timing of that growth and the resulting operating performance is difficult to forecast. There speaks a man with an eye on the US stock market and the almost inevitable class-action suits if one puts a word out of place.

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