Software helps lift EDP profits by 20%

ELECTRONIC Data Processing, the computer software and services group, lifted pre-tax profits almost 20 per cent to pounds 4.9m for the year to 30 September despite lower sales, writes John Murray.

Group turnover fell 11 per cent to pounds 15.5m. But growth in EDP's high-margin software licensing business and higher interest receipts on its cash balances compensated for plummeting prices for the hardware it distributes.

Richard Jowitt, managing director, said he was delighted with the results in the face of a hardware market that had seen prices squeezed by 58 per cent year-on- year. The company was determined to reposition its business to become a software publisher.

He added that trading remained flat, but said the company would launch a new software product in the new year. EDP plans to use this to attack the North American market for the first time.

The company was keen to make acquisitions, Mr Jowitt said, acknowledging the diminishing benefit of substantial cash balances at a time of lower interest rates.

'We know who our targets are and what price we would be prepared to pay. Trading is going to remain tough but there are many opportunities for us if the economy begins to go the right way.'

Earnings per share rose 17 per cent to 32.83p and the shares closed 10p higher at 510p.