A successful Israeli psychometric testing company now wants to sell internet based human resources software in America. Although it sounds an unlikely business proposition, Pilat Technologies International Ltd has been trading profitably for over 20 years, and chief executive Avi Engel has no intention of getting his fingers burnt in the US, even though he admits that with companies like Peoplesoft Inc around, he’ll be selling ice to the Eskimos. Currently traded on London’s Alternative Investment Market, Pilat has just released interim figures for the six months to June 30 showing pre-tax profits up 6.3% at 554,000 pounds on turnover up 28.3% at 8.3m pounds. Despite its Israeli origins, 80% of the groups profits now originate from within the UK, and the interim figures also include losses of around 120,000 pounds from the newly acquired US operation NAI. This is now turning a profit according to Engel, and as NAI switches to Pilat’s product range, sales are picking up. Trophy clients like Federal Express Corp have already been signed. Pilat provides a diverse range of services based around the human resources theme, including high volume psychometric testing and even an employment agency facility. But by far the most profitable of the group’s activities is its software arm. Pilat sells a range of packaged software products for monitoring staff performance and managing career progression within organizations. The latest offering is an internet-based application called 360 degree feedback which takes a lot of the pain out of management appraisal schemes. Appraisals are filed electronically from all relevant work colleagues who have been prompted to contribute via email. The final performance report is currently still delivered on paper, but Pilat is working on an interactive electronic version to be delivered via a browser. The group also handles bespoke development work, carried out mainly in the rapid development language Magic, with a high profile Broadcast Management System just completed for BSkyB. The kind of specialist knowledge Pilat has developed will make the company very attractive to the large ERP vendors and consultancy houses whose current human resource modules focus mainly on the administrative and payroll aspects of personnel management. Pilat has been involved in several situations where its $50,000 packages have been purchased to supplement existing multi-million dollar Peoplesoft implementations. Unsurprisingly then, the board has already turned down one acquisition offer from an unnamed $5bn turnover consultancy firm. Pilat is currently trading at price to earnings ratio of 15.2 versus a sector weighted average of 18.8, and Engel didn’t consider the premium offered to be sufficient.
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