Hi-tech adds up to high performance
Computers dominate the Independent 100 and Middle Market 50 listings of fast-growing companies. Roger Trapp reports
Sunday 05 May 1996
Not only is Pet Plan Group, the vets' bills insurance company that has appeared in the Independent 100 list of fastest-growing companies for five consecutive years, based there. Two computer companies that feature strongly in the Middle Market 50 also operate from the suburb by the Thames.
The presence of Morse Group and Orion Group in the upper reaches of the rankings produced by the Independent on Sunday in association with accountant Price Waterhouse does much to allay the impression that the computer sector is not as dominant as in previous years.
For all the attention given to Carphone Warehouse, placed first in the overall listing, and Caudwell Subsidiary Holdings and The Peoples Phone Company, first and second in the Middle Market, the computer sector still accounts for the largest share of entrants. In the main listing the number rose from last year's 20 to 21, while in the Middle Market ranking, established by Price Waterhouse to recognise the achievement of companies that had at least pounds 5m of sales in the first year of the five-year period, it remained steady at 10.
Despite falling from its top spot in the 1995 Middle Market 50, third- placed Morse, which was 25th in the main table, continues to expand at a strong rate. Last year's sales were held back, says managing director Nick Read, by freezes on capital spending among the US investment banks that are among its key customers. But since the turn of the year the business, which saw turnover rise at an annual compound rate of 53.1 per cent to nearly pounds 65m in the five years to June 1995, has "come out of that with a vengeance".
In recent months Morse, which has sought to protect itself from the falling prices by providing steadily larger and more expensive computer systems, changed its ownership. Mr Read and his fellow executives bought the company from retiring chairman John Britten with the support of 3i and the venture capital arms of the Prudential and NatWest.
Neighbour Orion, which was placed 26th in the main listing and fourth in the Middle Market by achieving compound annual sales growth of 53 per cent a year, is in the business of computer supplies.
Orion has built itself into one of the country's largest distributors of accessories for computers made by such well-known names as Digital, Hewlett-Packard and IBM. The company has five locations around the country and its workforce has grown to about 200.
Managing director Damien Griffin says the business is still growing, with turnover set to grow from last year's pounds 65.2m to about pounds 80m this year. He sees the basis of the company's success as its decision to be a "one- stop shop" for all the leading brands.
But it is not just Brentford that is a hotbed of activity for computer companies. Yorkshire has produced its share, with seventh-placed Spectrum Computer Services and eighth-ranked Integrated Technology (Europe) leading the way.
Bradford-based Spectrum, run by managing director Barry Burns, is in a variety of areas of the computer business. Having started in software and bureau services, it now also supplies systems for the health, local government and education sectors.It has lifted turnover and profits to the point where it last year achieved sales of nearly pounds 33.5m.
ITE was started in early 1985 by Andrew Kaberry and Peter Wilkinson, who had been finance director and international operations director of computer services company Systime. When a US company took it over and decided that they were part of the old guard, they left and started concentrating on computer hardware. With turnover rising at a compound annual rate of 42.4 per cent over the five years to last year, sales have now reached pounds 39.3m. ITE has stuck to supplying large companies in its own area as well as international corporations, such as Barclays Bank, and supplying the top end of the distribution trade.
Though the company has hitherto been self-financed, the founders recently sold a third of the company to Paul Sykes, the Yorkshire entrepreneur, as part of a plan to invest in Planet Online, an operation targeting businesses that want to get on to the Internet.
In return, Mr Sykes, who is said to be worth about pounds 250m, has become chairman of the company.
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