Despite reporting profits up 41.5% to ú475,126 on turnover up 36.4% at ú8.7m, DCS Group Plc’s interim figures failed to impress the City and its share price dropped 8p to 91p. Managing director Ray Spence said that this was due to an element of profit-taking by shareholders – the company’s shares had risen to 99p […]
Despite reporting profits up 41.5% to ú475,126 on turnover up 36.4% at ú8.7m, DCS Group Plc’s interim figures failed to impress the City and its share price dropped 8p to 91p. Managing director Ray Spence said that this was due to an element of profit-taking by shareholders – the company’s shares had risen to 99p from 85p in two weeks and small shareholders were keen to profit from this sudden price rise. The Leamington Spa, Warwickshire-based company’s core business is developing and supplying Unix systems to car dealerships for sales and stock management, and this division contributed 59% of group turnover. The rest was made up by the automotive importer systems operation and the distribution and warehousing division, which contributed 24% and 17% respectively. Within the automotive dealership division, Spence said the Global Dealer Management System product had won ú4m of business in the last six months with 32 contracts for 50 different installations. However, he admitted that these installations were behind schedule due to a lack of management control. I spent a lot of time on the Computer Services for Industry deal and my eye came off the ball with DCS, he said. Spence has now hired a managing director for the division from competitors, Kalamazoo, to address this problem. Spence said Europe was also proving to be particularly exciting market with Renault SA, Citroen SA, Peugeot SA and Fiat SpA all currently evaluating the product with deals likely by the end of the year. The company’s DCS/400 automotive importation system, which controls the import and distribution of cars and car parts into different countries, is now used by Rover Group in Japan, Saab AB in Thailand, Volvo AB, Renault and Porsche AG in Hong Kong and Seat SA in the Netherlands. The distribution and warehousing division gained its first contract in South Africa for its UniQuip plant and equipment distribution system. The company said that its strategy was to mould the business into three vertical markets: automotive importation and distribution, supply chain management and technical services and facilities management. The acquisition of Computing Services for Industry Ltd for ú8.2m in June (CI No 2,681) and the purchase of a 20% stake in Groupe Bonnaud Maupa for ú750,000 (CI No 2,717) were in line with strategy although Spense said he ruled out any further acquisitions for the time being. The board has proposed an interim dividend of 1.0p per share.