IT breeds new multi-millionaires
Wednesday 17 February 1999
Duncan McIntyre, the chief executive of Morse, is likely to be worth around pounds 25m on paper when the computer distribution group joins the Stock Exchange in a pounds 300m flotation later this year.
Meanwhile, Mark Hunter, the chief executive of the consultancy Axon, will see his shareholding valued at up to pounds 30m. The firm, which specialises in implementing business software supplied by the German giant SAP, will be valued at pounds 80m to pounds 100m.
It has also emerged that the chief executive of Synstar, the desktop services and disaster recovery group, will pocket up to pounds 7m from its flotation which will be valued at pounds 252m to pounds 301m.
Richard Ferre is thought to have invested under pounds 1m in the company 18 months ago when it was the subject of an pounds 89m management buyout from Granada, the hotels and media giant.
The bonanza suggests that British investors are once again enthusiastic about information technology stocks. Shares in leading computer services companies have recovered this year after a serious wobble in the autumn of last year.
However, the rash of flotations has revived accusations that the management and their venture capital backers are seeking to cash in ahead of an expected slowdown in demand for IT services later this year.
Those fears were fuelled by the revelation that Synstar is facing potentially damaging compensation claims if its clients' computer systems fail as a result of the millennium bug.
Synstar's flotation prospectus reveals that its disaster recovery division - which provides a back up of companies' computer systems to prevent information being lost in a disaster - could be held responsible for the failure of two of its clients' systems which are unlikely to be ready in time for the millennium. Synstar is liable to pay up to pounds 4m of damages if the systems fail. In the year to last September, the company made a total operating profit of pounds 9.4m.
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