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January 25, 1988

TELECOMPUTING CONFOUNDS DOOMSAYERS WITH 15% INCREASE IN PROFITS

By CBR Staff Writer

Fears of dreadful figures from Telecomputing Plc were not borne out in the event, and the firm yesterday reported pre-tax profit up 25% at ?886,000 on sales up 14% to ?3.4m. But the results do include only the first five sales of Top-One, the expert system building product that is billed as the future of the company, are included in this period. The next half will really show whether Telecomputing is about to break free from its ICL origins and make it big in the bigger IBM pool, or whether its ?2.5m investment in Top-One is barely recoverable. Chairman Bernard Panton reckons that he needs 30 sales to recover his cost of development, and say simply we had five in last year, sales haven’t dried up and if you want to predict our results for next year, pick a number between five and 30 for Top-One sales. This gives the overwhelming impression that he agrees that Top-One is Telecomputing’s future, and that the ?600,000 in 1987 from maintenance revenues; and the 50:50 split of the remaining revenue between new sales of the ICL TPS teleprocessing monitor and consultancy for the same, will continue next year in the same order of magnitude. Since Telecomputing’s growth seems tied to the new product, Panton is understandably angry at the suggestion that the US sales are not doing well. We have someone selling for us in the US, and we have prospects that are keen to see the product. We held everything up because of protracted trials of Top-One. It just wasn’t going fast enough and we had to get that right first. Now we’ve cracked it. However all sales to date are in the UK. The Top-One name comes from Transaction Oriented Prolog, and is a system enabling the building of expert system applications that will mesh with existing transaction processing applications and operate at around the same speed. It’s not a replacement for any transaction processing monitor, but it should help build applications that can run alongside any of them. It is re-assuring that at least one Top-One sale is the IBM version – it runs on both ICL and IBM mainframes – and that not all the ICL sales were to tried and tested TPS users.

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