Even Electronic Data Processing Plc isn’t totally immune to economic pressures, and managing director Richard Jowitt blames price compression on hardware products for reduced sales at the half-year stage in 1992. Pre-tax profits rose 29% to UKP2.4m on revenues that dropped 14% to UKP7.5m. According to Jowitt, volume of sales was only slightly down on […]
Even Electronic Data Processing Plc isn’t totally immune to economic pressures, and managing director Richard Jowitt blames price compression on hardware products for reduced sales at the half-year stage in 1992. Pre-tax profits rose 29% to UKP2.4m on revenues that dropped 14% to UKP7.5m. According to Jowitt, volume of sales was only slightly down on the same six-month period in 1991, and service revenues are now contributing in excess of UKP8m per annum. EDP, the exclusive European (and Russian) distributor of NCR Corp’s ADDS Mentor Pick boxes, currently does 25% of its business through distributors, which resell the ADDS hardware and Mentor Pick-based operating environment. The balance of EDP’s revenues come direct from the distribution market, which the Sheffield-based company has successfully made its niche, with its Mentor-based Merchant application software. Acquisitions are still high on EDP’s priority list, particularly as April’s agreement to buy Manchester-based Applied Computer Systems Ltd (CI No 1,905) fell through – Jowitt says the firm had misrepresented what it had for sale; EDP walked away with a minimal damages claim. EDP had been interested in Applied’s distribution-based customer list Jowitt would not disclose the size of his firm’s user base, but said that any future acquisitions would be initiated as much on grounds of expanding its current user portfolio, as on the addition of complementary software offerings. EDP’s On-Site service (CI No 1,827) is now up and running, with one major deal already signed, for a 380-terminal installation. The new scheme, which is expected to increase EDP’s margins, operates as a service contract, where EDP willtake all decisions about a customer’s installation. The user pays a quarterly service fee, with the option to try out a system before signing up, to verify that it lives up to expectations – if it doesn’t, EDP takes it away. We’re effectively mortgaging our margins, explains Jowitt, who reckons EDP’s long-term profitability will benefit from the new OnSite scheme. The first financial rewards from the system, however, aren’t expected to show through until next year. The Partnership Solution Vendor scheme, meanwhile, has been put on hold until later in the year. EDP boasts UKP11.25m cash at March 31, up from UKP8m at the year end, before the UKP1.65m outlay for the new corporate headquarters at Beauchief Hall in Sheffield (CI No 1,880), which will also host the firm’s expanding software development activities. EDP retains the freehold to its previous address in Sheffield, though several third parties have shown interest in taking out a lease on the premises. The growing software development arm, which in time will require more staff, is being kept pretty much under wraps. Jowitt did let it be known that EDP is working on leading-edge environmental software – a new software environment that is, and not a green application package. The results of the research, which has been keeping EDP developers busy for the last three to five years, will be announced in mid-September, as the new software goes into beta test. It is expected that first customer installations will be in place by November. EDP sees no sign of an upturn in the economy this year, but nevertheless remains confident of another successful year to September 30.