Enterprise Computer Holdings Plc has seen its turnover plummet from the 15th floor into the basement, but at least it made a pre-tax and pre-minority interest profit. Taking out last year’s sales from discontinued operations still leaves a 65% fall in revenue. Results included UKP677,000 profit from the sale of its stake in Systems International to Carterhouse Group Plc. Much of the drop in Enterprise’s revenue can be laid at the door, or rather the grave, of the mainframe, with demand for second hand-machines falling faster than anticipated: in common with other members of the industry, we were surprised at the speed with which the market changed said chairman John Small’s statement. Over the last year, the company has transformed itself from purveyor of second-hand mainframes to what chief executive Leslie McNiell describes as an information transfer company, one result being that around 80% of the staff are new. Only around 30% of revenue now comes from the mainframe side, and that is shrinking still, says McNeill. Despite that he believes that the company is about to turn the corner. What you are seeing in the September figures doesn’t reflect much of the new software he says, and believes that revenue in the second half of the year should be double that just reported. By March 1995 he expects to see the turnover at UKP40m to UKP50m. The strongest growth is in the US, reflecting that continent’s love-affair with business process re-engineering. Currently the US accounts for 35% of the company’s sales, but McNeill is expecting a 50:50 Europe-US revenue split by the middle of calendar 1994. The UK remains a difficult market, he says, while in Germany the recession may begin to bite. One of the things that McNiell tries to stress is that today’s IT industry is not an evolution of the 50s and 60s computer industry… today’s industry started around 1986. If that sounds like a management consultant speaking, you are right. Before he was chief executive at Enterprise, McNeill was a senior partner with Hanna Group, a West Coast consultancy and venture capital firm: 15 months ago Hanna bought a 1.25% equity stake in Enterprise and founder David Hanna is a director of the Plc. The relationship between the two companies is a novel one. Under the new regime Enterprise sees itself as a systems integrator cum networking company and uses its mainframe legacy to access the big old acounts now looking with trepidation at easing their water-cooled mainframes into the client-server world. Having a name like Enterprise around is a comfort to data processing managers, says McNeill – there is something of a common bond. Enterprise itself is steering well clear of developing software or technology. When it requires a piece of technology, Enterprise calls up Hanna to find out whether any of its small clients – venture capital start-ups for the most part – have anything which would fit the bill.

Commensal relationship

As described by McNeill it is the perfect commensal relationship: Hanna’s clients often have excellent technology or products, but lack the wherewithal to bring them to market. Enterprise, by contrast, has the customers, but does not want to get bogged down with bespoke system development. Back at the figures, SRH Plc the associate company in which Enterprise has a minority shareholding, contributed a UKP37,000 loss to the parents figures. SRH has agreed to sell its communications arm to TSB International of Canada and as a result a UKP3.5m loan that Enterprise made to SRH will be paid back early – in the first quarter next year. Enterprise also intends to sell some property with a combined value of around UKP3.3m, the proceeds of which will be used to reduce debt. Enterprise could do with shaving of some debt: interest charges came to UKP286,000 compared to UKP51,000 a year ago. However the company points out that this is much reduced compared with the second half of last year and says that it continues to trade within its banking facilities. The balance sheet remains about the same as at year-end and the company

will not be paying a dividend.