UK-based financial software house Rolfe & Nolan Plc is now picking itself up after a year that its directors would probably prefer to forget. With a successful product supplying back office systems for the trading of derivatives, Rolfe and Nolan had enjoyed booming revenues and income. Confident it could develop further into the financial sector, the company decided to develop a new product called Lighthouse, a risk management application for the capital markets. This stretched capital resources and Wayne, Pennsylvania company, SunGard Data Systems Inc sprang a $115m bid which Rolfe & Nolan’s board were obliged to accept. Users of the companies’ software then bombarded competition authorities on both sides of the Atlantic with protests that this would create a monopoly and SunGard was forced to withdraw its bid (CI No 3,384). The saga left Rolfe & Nolan short of orders and still saddled with the Lighthouse development cost. Its directors decided that Lighthouse was taking them in the wrong direction and sold the operation to Financial Systems Inc, a spin-off from Bankers Trust, for 4.6m pounds plus royalty payments. This capital gain has led to a 507,000 pound tax charge in the first half, which leaves it with a net loss of 302,000 pounds, 18.3% down on the deficit recorded last year. While its main problems may be behind it, revenues from continuing operations are down 4.2% in the first half. Rolfe & Nolan’s future clearly rests on success in the US where revenues grew 31% and now provides its biggest market.
