QSP comes to market: Software systems house plans pounds 5m placing

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QUALITY Software Products, the Gateshead-based systems house, is planning to join the stock market next week via a pounds 5m share placing sponsored by Hoare Govett.

The issue is expected to value the company at about pounds 25m and is likely to attract much interest from City investors. About 10 per cent of its shares are owned by IBM, the computer giant with which it has a close marketing agreement.

Other outside investors include 3i and Advent, the venture capital groups.

The company specialises in financial and management information software for use on IBM machines. However, its market debut coincides with the launch of a big new product, Universal OLAS, which some industry experts believe has worldwide potential as it has been designed for use with most other computer makes.

But the product's heavy development costs led to a fall in taxable profits from pounds 1.6m in 1991 to pounds 1.2m last year, on a one-fifth jump in turnover to pounds 13m. The results included pounds 600,000 one- off costs in 1992.

About 70 per cent of Quality Software's sales come from existing clients, which include British Airways and the Bank of England.