JBA to raise profile with 9.6m pounds flotation

A BUSINESS software developer, JBA, announced a price of 160p in a placing that will value it at pounds 53m. It is raising pounds 9.6m net of expenses to repay debt and preference shares and augment working capital, writes Diane Coyle.

JBA specialises in software for IBM's AS/400 machines, of which there are more than 200,000 installed around the world. It has only a 1 per cent share of the fragmented market and hopes the flotation will raise its profile.

The company was founded by Alan Vickery, chairman, and Kevin Jones, software director, in 1981. Turnover last year was pounds 74.5m, up from pounds 55.9m. Profits before tax were 27 per cent up at pounds 4.7m.

Just under half of JBA's sales are in the UK, one of Europe's smallest software markets. It has expanded overseas through a series of small acquisitions, with North America its second biggest market. Its software consists of a series of business applications from payroll and sales to production scheduling.

The directors have sold 17 per cent of their shares to leave them with 38 per cent of the company. Existing shareholders CINVen, Lloyds Development Capital and IBM will retain stakes of more than 3 per cent.

The placing price puts the shares on a historic price-earnings ratio of 16.3. Mr Vickery said it was the company's policy to increase dividends in line with earnings per share. Dealings are expected to begin on 30 June.