Jitters as Maid sets out stall

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The Independent Online
MAID, the on-line business information provider being floated on the stock market, is under fire in the City over its alleged use of highly flattering accounting policies.

The group - set up by its 30-year-old chief executive, Dan Wagner, in 1985 - plans to raise up to pounds 20m through a share placing next month. The flotation is expected to value the group at about pounds 80m.

A pathfinder prospectus issued by the company is raising eyebrows. One institutional investor said he believed the company's accounting policies are not conservative enough.

The issue relates to the costs of developing Maid's indexed delivery system, which are written off over five years. Maid also accounts for product development costs over three years. Some investors believe it should write off costs as they are incurred.

The group doubled taxable profits to pounds 603,000 last year on sales up from pounds 3.5m to pounds 6m. Some potential investors have been put off by its expected pounds 80m market tag - which equates to almost 200 years' historical net profits.

The valuation prompted one witty broker to dub Maid - which stands for market analysis and information database, as 'milk all investors dry'. However, Maid says it is 'one of the world's most innovative' suppliers of on-line information and has considerable potential for expansion.

According to the prospectus, the market for on-line information is expected to jump by 50 per cent to dollars 15.2bn ( pounds 10.3bn) by 1997.

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