ACT merges financial software subsidiaries: 'Size matters when you are trying to trade across the globe'

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The Independent Online
THE restructuring of ACT, one of the country's biggest software companies, reached a climax this week with the announcement that its three financial software subsidiaries will be unified under one operating board from April.

The company plans to sell its remaining non-core businesses, following two disposals last month. The non-financial subsidiaries account for two-fifths of the group's pounds 250m turnover and a fifth of profits.

Roger Foster, group chairman, said: 'We have moved to a single focus, financial software. We cannot compete with companies like IBM, EDS or Reuters on a wide front, but in our own field we can beat them in the long term.'

The reorganisation is the logical conclusion of a series of acquisitions and disposals. ACT sold Apricot, its computer manufacturing arm, to Mitsubishi in 1990 and used the proceeds to acquire two big financial software firms, Kindle in 1991 and BIS Banking Systems in 1993, to augment its own ACT Financial Services division. All three will carry the ACT brand name.

Mr Foster said that the reorganisation was 'market- driven'. Customers had been buying group products from three different sets of salesmen. From April they will have one point of contact with ACT, which will gain from the cross-marketing opportunities.

'There are not many truly multinational companies in the software business,' said Mr Foster. Most of ACT's competitors are far smaller and rival them in individual markets. The group hopes to exploit its international spread in more dimensions than marketing, however. Product development will take place in New York and Moscow as well as Britain, to make use of local market knowledge.

Andrew Bryant, an analyst at BZW, said: 'There are dangers in trying to grow too fast, but ACT is not heading all-out for the US, where so many British software companies have fallen down. It has also done a great job of managing rapid growth so far.'

The company said it planned to expand into emerging financial markets in Eastern Europe, the Pacific Rim and South America. In the main financial centres it would try to increase market share.

Mr Foster said: 'Size does matter when you are trying to trade across the globe. We will be the biggest player in financial software.'

(Photograph omitted)

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