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November 24, 1995

TAKE-OFF OF DIGITAL INFORMATION SLOWER THAN ON DEMAND EXPECTED

By CBR Staff Writer

The fast-growing digital information market has not grown as fast as On Demand Information Plc would like, or expected. As a result, the Leeds-based electronic publishing company is not expecting to improve on this year’s turnover figure, despite its recent distribution agreement with British Telecommunications Plc, which it hopes will net it around ú20m in revenues over four years. The contract came after the year-end on July 31. Pre-tax losses increased to ú3.6m from ú2.6m last time. Turnover from continuing operations was up 68% at ú8.8m. The parts of On Demand that were not related to electronic publishing were transferred back into chairman Graham Poulter’s marketing and advertising company, Poulter Communications Plc. The company believes that the market is around 12 to 18 months behind schedule. British Telecom will pay On Demand ú1.85m to sell the company’s Construction and Personnel multimedia information products to business customers. Some ú800,000 of that is towards marketing costs and British Telecom will also pay a significant part of all subscription revenues (CI No 2,793). The two are to explore other channels of distribution, including the Internet. On the medical side, On Demand produces Pictures of Health, which is a narrowcast channel beamed into more than 2,000 medical practices in the UK.

Gilt-edged

Some On Demand medical information programmes are to be included in British Telecom’s interactive television trials in Colchester, Essex. The company also signed a three-year strategic alliance with Hewlett-Packard Co, under which the latter will pre-load information about On Demand on every personal computer it ships in the UK, as well as acting as an equipment broker to On Demand customers (CI No 2,746). It too was signed after the year-end. On Demand wrote off ú457,000 in the year as a result of the fall in value of gilt-edged government stock in which it was advised to invest. It will receive ú300,000 compensation over two years from its financial advisors, and received ú205,000 income from investments in the year. Unfortunately, nobody at the company was available to clarify the nature of this income, but it expected to receive the majority of the compensation this year. The multimedia production unit won a contract from IBM Corp for the development of National Vocational Qualification training modules to be delivered on CD-ROM. With the British Telecom pact the company feels it has demonstrated the viability of the business sector’s demand for electronic publishing and programming, and together with the corporate applications, such as training, it is confident of considerable growth and profits over the next three years. After slipping all day, the shares bounced back late on, adding a penny at 110p. There is no dividend this year.

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