Although futures and options computer bureau Rolfe & Nolan Computer Services Plc is thriving, losses from its Chicago-based partner, Brokerage Systems Inc, hit interim profits. Pre-tax profit was flat at UKP707,000, although turnover soared 61.9% to UKP5.3m. Excluding Brokerage Systems, profits rose 15% to UKP813,000, while turnover rose 19% to UKP3.9m. The proposed interim dividend […]
Although futures and options computer bureau Rolfe & Nolan Computer Services Plc is thriving, losses from its Chicago-based partner, Brokerage Systems Inc, hit interim profits. Pre-tax profit was flat at UKP707,000, although turnover soared 61.9% to UKP5.3m. Excluding Brokerage Systems, profits rose 15% to UKP813,000, while turnover rose 19% to UKP3.9m. The proposed interim dividend was up 11% to 2.6 pence. Current accounting rules require the London-based group to include the entire losses and revenues of Brokerage in its results, even though it holds only a 19.9% stake. For its first six months to May 31, Brokerage made a loss of UKP106,000. Sales levels have not been as good as expected, and losses are expected to increase in the second half due to restructuring costs, particularly in client support. The relationship is not expected to provide Rolfe with any financial gain until the 1993 fiscal year. It acquired the stake in BSI in January 1992, with the aim of becoming a more global company. The two firms have now established technical links to exploit sales opportunities on both sides of the Atlantic, their businesses being very similar in nature. Rolfe is currently holding discussions with Brokerage to buy the remaining 80.1% of shares, either by using the pre-determined earn-out formula based on the 1991-92 and 1992-93 results of Brokerage or by some new financial agreement. The purchase option must be exercised before May 28 1993, and is subject to shareholder approval. In the UK, Rolfe benefitted from recent financial and political uncertainty surrounding the major European currencies. Bureau and facilities management revenues at the London Datacentre rose 7%, with record volumes of information processed there during September and October. Some customers withdrew their business, but this was offset by six orders from new customers in the UK and mainland Europe. One particularly lucrative deal came from a leading Spanish financial institution – Rolfe’s first contract in the country. There was also a significant improvement in licence sales, following a difficult period last year. Seven were sold in all, four in Switzerland, and one each in Denmark, Germany and Italy. Part of the revenues from these sales will be recorded in the second half as not all of the systems were installed by the end of the period. Prospects for further new licence sales and renewals are said to be good, despite indications that continuing political and monetary uncertainty may be causing customers to delay ordering new systems. For the second half to date, one licence has been renewed for a further five-year term. Total recurring revenue from bureau operations, facilities management and software licence support rose 12% to UKP2.7m, making up 70% of group turnover. Rolfe now has cash and short-term deposits of UKP2.9m, up UKP6m on the comparable period last year.