Fresh from three recent acquisitions that by the end of the year will account for more than 50% of its turnover, UCL Group Plc is coming to the Unlisted Securities Market on April 30 by way of a placing by Capel-Cure Myers of 12.5% of its equity. The placing at 125p per share values the Pick and Unix systems company at UKP9.98m and will raise UKP1.1m net of expenses, all for the business. The company’s core, and indeed before October 1986, only business is Universal Computers Ltd which in the year to December 1986 made UKP827,000 pre-tax on turnover of UKP6.3m. It is the largest value added reseller of Ultimate Corp’s Honeywell DPS 6-based Pick products outside the US and also markets Pick on Altos and Tandem Computers boxes. Since October, Universal has included Datec, the former software subsidiary of Debenhams, acquired from Burton Group Plc. Datec brought with it Minder, a debt collection and litigation package for which the UCL management has high hopes. In the same month, South London-based UCL also acquired Copyplan Reprographic Ltd of Oxford, an office equipment company that sells NEC facsimile machines, Sharp photocopiers and IBM electronic typewriters. And, in January this year, UCL paid UKP1.3m in a mixture of cash and shares for Nexel, the last surviving part of Nexos, the National Enterprise Board’s disastrous office automation experiment. Nexel made a loss of UKP115,000 – UKP112,000 due to an extraordinary item – for the nine months ended December 31 1986 on turnover of UKP3.1m. In the full 12 months to March 31, it lost UKP6,000 on revenue of UKP3.2m and its profit record over the last five years is patchy to say the least. To UCL managing director Alan Wilson, this is one of its attractions.
Healthy positive contribution
He and finance director Ian Walker say it will turn round easily and will definitely make a healthy positive contribution this year. Four sales staff have been taken on to sell Fortune Systems Corp kit, to which UCL has just acquired exclusive UK distribution rights, to Nexel’s existing Unix products maintenance base. The breakdown of revenues so far in 1987 shows that maintenance – spread equally between Pick and Unix – accounts for 41% revenue, hardware and bundled software accounts for 48%, office equipment 6% and separate software, including Ambdev, an ambulance booking and control system; U-Care, a children in care package for local authorities; and FMS, a financial management system bought in from Price Waterhouse, a growing 4%. Half of Universal’s sales last year were to the financial sector with approximately one third of that to software houses, like Consultants (Computer and Financial) Plc which it supplies with its hardware needs, that specialise in that area. As if the company’s prospects are not difficult enough to assess as things stand with all the new businesses being brought into the fold, UCL is considering further acquisitions and is still involved in legal action with Datamedia Corp over the Datamedia 932 which ICL sells as one of its Clan range. If Datamedia’s appeal against a judgement last September is upheld, UCL could find itself with further legal fees in addition to the UKP200,000 it has written off over the last three years. If not, then it can look forward to a bonus that currently stands at nearly UKP1m. Definitely not a share for widows and children, but UCL could prove to be a bargain buy – even on an historic price-earnings ratio of over 17 times.