The information technology mini-conglomerate Lynx Holdings Plc of Oxford, which can claim a thumb in the communications, software, systems and services pies, has continued its acquisition-led meteoric profit rise.. Pre-tax profit for the year to September 30 jumped 193.6% at UKP1.6m, and turnover was up 100% at UKP21.5m. Indeed the figures would have been even rosier but for a 8% tax rate hike to 18%. The contribution from acquisitions came in above the company’s expectations, putting an operating profit of UKP1.4m into the company kitty, on turnover of UKP8.3m. During the year, newly acquired Chess Valley Computers added Direct Line Financial Services to its customer list, providing mortgage, personal loans and savings software. Financial Systems Ltd, which provides banking, fund management and trust administration software to the off-shore financial services market, also performed well. Computer Services Technology Group, acquired by Lynx in March (CI No 2,373), has broadened the company’s existing service provision, CST Lynxserv, particularly in Unix and networking area. Although trading in the company’s personal computer maintenance business has been difficult, the division made a small profit at the operating level. Signal, the automotive software and systems supplier, which absorbed Lynx’s existing automotive software company, Prism, also exceeded expectations in its first full year of ownership and has recently launched a new showroom product. APD-Mertech, Lynx’s radio communications company, was expanded in the year by the acquisition of S.Com Mobile Data Systems in April (CI No 2,398), although turnover here was below predictions. When Richard Last, managing director, took over, Lynx had embarked on a course of buying companies involved in the leisure sector.
Suitably impressed
However, Last saw far more potential in the group’s computer- and communications-related companies and the computing sector generally and set about divesting the group of its leisure interests. In the last year, Lynx sold Bounceabout Leisure Ltd, purveyors of bouncy castles, and is looking for a buyer for its last leisure company, Townart Group, which supplies outdoor playground equipment to local authorities. These disposals, coupled with net cash levels of UKP2.2m, will help fund Lynx’s intention to grow by acquisition though Last expects to come back to the market to fund larger acquisitions. He will make acquisitions in the next six months and is currently talking to people, although Lynx is normally is discussions with someone and as is the way with these things, more often than not these talks break down. At the interim stage (CI No 2,413), finance director Paul Sinnett expressed Lynx’s desire to expand into a fourth vertical market by acquisition and this still holds as Last looks to add to the software systems business. Last has identified markets but was unwilling to disclose Lynx’s direction. If any acquisition has value attached to its name in its particular niche, Last will maintain its identity – you pay for goodwill, after all. However, he is not keen on trying to keep 20 small heterogeneous companies under a Lynx umbrella, as it guarantees managerial chaos. The company will pay a dividend of 1.40pence, up 12% on last year. The markets were suitably impressed, adding tuppence to 51p.
