Revamp takes toll of ICL results: Computer company says it will seek listing in two to three years

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The Independent Online
ICL, the UK computer company in which Fujitsu of Japan has an 82 per cent stake, saw pre-tax profits fall to pounds 23.4m last year from pounds 38.6m in 1992 after a charge of pounds 47.7m to cover redundancies and other rationalisation costs. The company cut 1,300 jobs in 1993 and is likely to shed a similar number this year.

ICL expects to be floated on the London Stock Exchange within two to three years. Peter Bonfield, ICL's chairman and chief executive, said Fujitsu remained committed to a flotation once conditions in the computer market improved and ICL returned to growth.

ICL is the only big European computer company to have remained in profit throughout the global downturn in the industry. Mr Bonfield said 1993 had been a difficult year but Fujitsu 'recognises the facts of life out in the marketplace'.

He added: 'I see 1994 as being similar to 1993 as we near the end of our reconstruction programme.' He said that although the company had not yet turned the corner completely, it would remain profitable and was well placed to take advantage of growing markets in the late 1990s and beyond.

ICL's revenues grew by 6 per cent in 1993 to a record pounds 2.6bn, buoyed by growth in the retail sector and a strong performance by the computer services arm. The company, which raised pounds 50m in November through a rights issue underwritten by Fujitsu, almost halved its debt to pounds 51m during the year.

Mr Bonfield said that since 1990, the year Fujitsu acquired the company, ICL had spent more than pounds 1bn of its own money on research and development, acquisitions and joint ventures. The rights issue was the first time it had turned to its parent for funds.

The company is on the lookout for further potential acquisitions among small companies specialising in areas such as software for the retail and financial services sectors.

Mr Bonfield warned that ICL was still reacting too slowly to rapid changes in the market. 'I think our Achilles' heel over the next few years will be whether we can move quickly enough into new high-growth markets, including deregulated telecommunications and multimedia.'

Another concern was that the company relied too much on its own sales force and needed to exploit a wider variety of routes to the market.

Mr Bonfield quashed rumours that he plans to leave ICL in the event of a successful flotation. But he said he would split the top roles at that point.

It is likely that only a minority stake will be floated, and it is almost certain that Northern Telecom of Canada, which owns the remaining 18 per cent of ICL, will sell its entire holding.

Two weeks ago, ICL and Fujitsu launched the first range of computer products to be jointly developed and to carry the badges of both companies. Mr Bonfield said although ICL was enjoying the fruits of technology developed with Fujitsu, the Japanese left ICL at arm's length in the day-to-day running of the business.

(Photograph omitted)

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