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November 7, 1995

TRANSFORMED BY VISTEC ACQUISITION, LYNX IS STILL LOOKING FOR MORE ACQUISITIONS

By CBR Staff Writer

These are important times for Lynx Holdings Plc as it focuses its business on the software, systems, services and distribution markets, having expanded them with two acquisitions with more in the pipeline. The Oxford company acquired the much bigger Vistec Group Plc after the year-end, (CI No 2,762). Vistec brings networking, maintenance and hardware and software distribution to Lynx. It will survive within the Lynx group intact. During the year Lynx also acquired Heywood & Partners (Holdings) Ltd, a payroll and personnel software company, for ú4.5m (CI No 2,631); that also survives intact within the group and contributed operating profits of ú503,000 from turnover of ú2.4m, which chairman Roger Pinnington said in his statement exceeded the board’s expectations at the time of acquisition. Since that time it has won IBM UK Ltd and Northern Electricity Plc as customers. Pinnington said Heywood already has orders to account for 70% of its target for this fiscal. Lynx finally got out of the leisure industry with the disposal of Town Art’s remaining street furniture and play area businesses for ú1.2m in June (CI No 2,680). The sale resulted in a goodwill write-off of ú451,000. This exceptional loss left pre-tax profits for the year to September 30 that were up 28% to ú2.6m, on turnover that rose 49% to ú32.0m. The various existing computer software and services business had a good year, with the automotive software unit doing particularly well with its communications systems between dealers and manufacturers, according to the company. In financial software, a contract was won with Royal Bank of Scotland Plc said to be worth more than ú2m. New products will be launched by the offshore financial software business in 1996.

On the prowl

The communications unit is now concentrating on mobile data systems and integrated radio and telephony command and control systems. Pinnington hinted at a joint venture to provide mobile data systems in the Asia-Pacific region. In computer services, the company enjoyed a substantial increase in the level of business and profitability in the year, said Pinnington. The level of IBM RS/6000 distribution is said to be increasing, which leads to further service revenues. Vistec’s Sphinx Level V business has distribution agreements with Oracle Corp and Banyan Systems Inc among others, and this side of Vistec is totally new to us, according to Paul Sinnett, Lynx’s finance director. Vistec’s computer services business augments Lynx’s own, distributing and installing hardware. Despite fairly heavy trading, Lynx’s shares were off just a penny at 60 pence yesterday. Future prospects, based on the first part of the year look encouraging for the group, according to Pinnington, and it will enjoy 10 months of business from Vistec for this fiscal. Still unsatiated, Lynx is on the prowl for further software and services business, and various options are being considered, according to Pinnington. The final dividend of 1.15 pence per share makes a total for the year of 1.55 pence, a rise of 11% on last year.

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