Technology Project Services of London SW1, which offers engineering and technical support staff for research and development on a contractual basis, appears to be having trouble increasing its margins. Despite reporting a second-half profit recovery during the announcement of its end of year results the company has managed to produce pre-tax profits for the year up only 5.3% at UKP1.2m on turnover up 14.7% at UKP10.9m. Technology Project Services mainly has staff skilled in electronics management and system software and design, and its projects in the UK and Europe largely cater for the telecommunications, defence, space and system testing and validation markets. One of the company’s main selling points would appear to be the cost effectiveness of its projects – a fact that may possibly account for its low margins as well as for its drooping share price. Although the company’s finances are looking firmer now than they did six months ago, thanks to a general industrial recovery following the market crash of October 1987, its growth has been totally in the UK since its interim announcement. Yet the company admits that to increase its margins it must attract more overseas work. A start has been made in this direction with Technology Project Services’ first award from NATO coming at the end of 1988 for a one year extendable programme for software development. But the company has still not been able to broaden its scope through acquisition because of what it feels are the unreasonably high asking prices for the companies it has been considering in the engineering and support area. On balance it looks as if its future fortunes rest both with its ability to expand its base in Western Europe, the US, Thailand and the Philippines, and with the fluctuating defence industry, currently about half its overall business.
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