Privately-owned Metric Group Ltd, a London-based supplier of electronic point-of-sale terminals to Poland, is being acquired by shell company HM Holdings Plc. HM began way back in the 1930s as Howard Machinery Plc, as a manufacturer of garden rotovators. At its peak, 70% of the world’s earth turners bought Howard machines. But it succumbed to the UK manufacturing decline in the 1970s and had its Stock Exchange listing cancelled in the mid-1980s. Its latest audited accounts, for the six months ended April, 30 show that HM had a net loss of UKP71,000 and current liabilities exceeded assets by UKP160,000. It has been kept going by creditors, who include the Imperial Tobacco Pension Fund. HM has now begun a six-for-one rights issue to raise between UKP500,000 and UKP2.1m and said investors can apply for more shares than their entitlement. The company will then be known as Metric Components Plc and will look for a flotation immediately. Job Maats, 40, founded Metric in late 1991 after 15 years in banking, including 13 with Citibank in the US, Brazil, Middle East and Greece. He believes this was a good training ground for the computer business: People think the electronics industry is bad: they should have seen Brazil in the 1970s when you could have three economic cycles in one year. Metric began when the opportunity to build point-of-sale systems was identified in Poland. The Xcel terminal was then developed and other companies were drawn into the group: PoSDedesign Ltd, already making EPOS systems, and Logix Technology Europe Ltd, which was sorting out European distribution for Lucky Goldstar International Corp. Subsequently, Metric bought majority shareholdings in Logix and PoSDesign. Maats believes there is still plenty of room for software differentiation in the retail and banking industries, and he claims Metric’s low-cost production structure can make customised EPOS affordable to all.

Silesia Valley

Hardware is bought in from Lucky Goldstar International Corp of Korea and the key product is a personal computer-based till which fits into a traditional cash register. Custom components are made and the systems assembled in Elzab SA, a 500,000 square foot factory in Silesia Valley, Poland which employs 500 people. Metric has a two year fixed price option with the Polish Ministry of Privatisation on the factory, and UKP125,000 will be allocated from the rights issue for the option; the plant will cost UKP2.5m. Maats took an analogy from his Dutch homeland to describe why he will exercise the option, but not yet: In Holland farmers would only marry fertile women, they want to be sure of getting a result. Metric also supplies banking terminals and keyboards, hand held data entry tools and servers. Customers include John Menzies Plc and the supermarket group Heald Plc. One of Maats’ allies as chief executive will be non-executive director Brian Mills, founder of Computer Management Group Ltd. But as the acquisition proposal warns: The Metric group has a short trading record from which it is difficult to draw conclusions as to the level of its potential turnover and profitability. Additionally, it shares a market with formidable competition from players like IBM Corp, ICL Plc and Casio Computer Co Ltd, the Elzab purchase may not succeed, and distribution may prove difficult.