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Technology / AI and automation

KEWILL’s FROGS DON’T JUST FAIL TO BECOME PRINCES, THEY KEEP RUNNING AWAY, BUT PROFITS RISE 21%

Its a case of steady as she goes at Kewill Systems Plc, as the manufacturing, finance and design software and consultancy company turned in a solid set of figures that reflected improving margins as hardware sales tailed off. Pre-tax profits were up 20.6% to ú2.6m, but a year ago these included a ú254,000 exceptional charge. Turnover edged up just 1% to ú16.6m. The company is looking to accelerate the growth with acquisitions. Kewill used to make an acquisition each year, but it had its fingers burnt with the acquisition of Weigang GmbH which it bought from receivers in Germany in 1991 and cost it a lot of money to turn round, before it gave up and sold it off. This experience has led the Walton-on-Thames, Surrey company to look closer to home in future. Chairman Kevin Overstall said at the full-year stage that the group’s cash was burning a hole in its pocket (CI No 2,691), and it still is. So before all the money falls through the hole and on to the floor it is looking to spend some of it. Overstall said the company had been kissing a lot of frogs, but not many have turned into princes. In fact, many have run away. The three most likely princes-to-be are a company with a warehouse control system, one with an unspecified mid-range control systems and an Electronic Data Interchange company. All are in the UK and all operate in existing areas of business for Kewill. Meantime cash balances were ú4.6m, up from ú3.6m a year ago. In the UK, operating profits were ú100,000 down at ú1.4m. In manufacturing, Kewill-Micross is in the process of upgrading its 15-year-old core product, Micross, which made steady progress. But Trifid, the mid-range manufacturing product, disappointed in the half, Trifid sales are a bit spasmodic, Overstall admitted. The company has set a ú1.5m profit target for manufacturing in the year. Over at financial systems, the company is expecting a ú500,000 loss from its Dynamics product, which is distributed by Kewill-Omnicrom in the UK.

Local authorities

The new Windows version has been held up by slow delivery of further modules to add to the existing ledger module. The lack of multi-currency modules makes it especially difficult to sell in the UK, said Overstall. In the field of electronic commerce, Kewill-Xetal, the value-added software provider is winning more customers in the high-street food retail sector, which it could not name, as well as in the public sector. One project about which is very excited is its involvement with Lacots, the Local Authorities Co-ordinating body on food and Trading Standards. This body co-ordinates the work of 10,000 inspectors in 589 local authorities in the UK, and the company hopes that its Perform Electronic Data Interchange product will make big inroads into that market. As well as Lacots itself buying it, Kewill has also sold systems to 12 local authorities, as well as central government ministries. Another target is the European Community, where mountains of paper work could be transformed with Electronic Data Interchange, believes David Cullis, managing director of Kewill-Xetal. Abroad, things are still happening slowly in Germany with the company’s marketing alliance with IBM Corp, where it rebadges Kewill’s CAD 400 BAU product. But IBM’s big blue boots continue to open doors for the company that would otherwise remain firmly shut, according to finance director Richard Broad. HAN Dataport won two large orders in the half on its own, including kitchen manufacturer Hoffner AG, which also bought 120 IBM RS/6000s from the company. In the US, Micross-MRP Inc has completed the conversion of the Micromax manufacturing software for Windows NT, to add to the Windows version. Software sales were up 30% in the US. The interim dividend is up 20% at three pence. Growth through acquisitions is clearly necessary for Kewill, and Overstall hopes that the frogs he tries to kiss do not retreat back into the pond.

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