[LBFFF] LONDON BRIDGE SOFTWA FOREIGN - UK*
UPDATE 2-London Bridge booms as U.S. econ slows
August 30, 2001 09:05:00 AM ET
(Releads with London Bridge, adds chairman's comment, Morse CEO, analyst)
By Jean Yoon, UK technology correspondent
LONDON, Aug 30 (Reuters) - Shares in Britain's London Bridge Software Holdings Plc rose on Thursday after it said demand for its credit-screening software products was surging because of the U.S. economic slowdown.
But sector peer Morse Plc , which sells computer equipment and services, failed to escape the wider technology sector gloom and said its trading outlook remained challenging, as customers delayed orders.
London Bridge Chairman Gordon Crawford said his firm, which sells software used by utilities, retailers and credit card businesses to follow up delinquent debts, was one of few tech firms enjoying a business boom.
"Our pipeline for collections and recoveries systems is probably the best it has ever been, especially in the United States," he told Reuters.
"Customers are now focusing more on bad debt provisions and deteriorating retail lending because of the slowdown."
The Administrative Office of the U.S. Courts said last week personal and business bankruptcies totalled a record 400,394 from April to June, a nine percent rise over the first quarter and a near 25 percent jump from the same period last year.
London Bridge shares gained 11.5 percent to 107 pence by 1220 GMT, but were still far off their peak of 16 pounds at the height of technology fever early last year.
Adjusted pretax profit was 5.5 million pounds ($8 million) in the six months to June 30, compared with 5.7 million a year ago. Revenues totalled 36.9 million pounds.
Last month said the company said it expected a profit of 5-5.5 million pounds and revenue of 36 million pounds.
"It's positive that their pipeline for risk management software is robust," said a London-based analyst. "The shares are also helped by the fact that they were oversold recently. It's relief rally."
SLOWDOWN HITS MORSE
Morse, Europe's largest reseller of Sun Microsystems (SUNW) and Hewlett-Packard (HWP) hardware, said it was suffering from weak demand.
"Customers are delaying orders due to uncertainty in markets," Chief Executive Duncan McIntyre told reporters on a conference call.
Morse shares, which peaked at 895 pence early last year, were down 2.9 percent at 170p, after touching a low of 155p.
Profit before tax, goodwill and exceptional items rose to 35.8 million pounds in the year to June 30 from 32.1 million a year ago. Analysts forecast a 34.4 million pound profit.
Turnover rose 16 percent at 586.1 million pounds with a net cash balance at the end of June of 41.8 million.
Its IT services revenue increased 58 percent in the year while the resale of computer hardware was less impressive, increasing 11 percent.
Morse took an exceptional charge of 2.2 million pounds for a restructuring which was announced in May. The company took steps to counter slowing demand that included reducing capacity, reorganising its management structure and consolidating small profit centres.
The restructuring will generate cost savings of approximately five million pounds a year.
"Early indications for the new financial year suggest that market conditions in the countries in which the group operates remain challenging," said Chairman Richard Lapthorne.
"On a comparable basis, activity levels in the opening months of the new year have remained subdued." REUTERS
© 2001 Reuters
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