Coda Group Plc’s chairman Rodney Potts and his board have steered the company back on to a steady course as it returned to profitability at the six-month stage. Interim pre-tax profits at the Harrogate, north Yorkshire accounting software firm were ú993,000, against losses last time of ú2.5m. The company followed the all-too familiar course of flotating in February 1994 and very soon after issuing a profits warning. causing the shares to lose their value from the offer price of 235 pence. They now stand at around 120 pence, up from a year low of 77 pence. Potts pursues the policy of charging all research and development costs to the period in which they are incurred. This time that amounts to ú3.0m, against ú2.7m in the first half last year, or 19.8% of turnover against 20.4%. Revenues from open systems are almost up to those of the old proprietary VAX systems, jumping 81% to ú5.3m and should pass the VAX revenues on their way up by the year-end. Potts said in his statement that the performance from the proprietary business was as he expected. There are now more than 60 installations of the open system, CODA-OAS around the world, according to the company. Coda recently announced two agreements in its attempt to get into vertical markets such as finance, retail, shipping, or in these cases, manufacturing. Strategic Systems International, a division of Powell Duffryn Group is integrate CODA-OAS into its Tropos manufacturing software (CI No 2,642), and last month Coda signed with Cincom Systems Inc in a similar deal. Software for IBM Corp’s AS/400 brought in revenues up 10% at ú4.1m and the original Coda environment, Hewlett-Packard Co’s HP3000 is still hanging in there with turnover of ú501,000. The US subsidiary, which was the only one showing an operating loss, has turned that round, due to the cost-cutting and management retructuring, according to Potts. Coda continues to pay no dividend, believing that to be premature at the moment, but Potts said payments will be resumed as soon as possible. Coda faces stiff competition at home from the likes of Quality Software Products Plc, JBA Holdings Plc and Sage Group Plc, not to mention SAP AG in Germany. Therefore, Potts, not wanting any more nasty surprises, is cautiously optimistic for the future, emphasising though that the company does not underestimate the challenges ahead.
