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Software-linking specialist floats at 100p

Diane Coyle
Friday 25 March 1994 19:02 EST
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UNIPALM, a group specialising in software linking computer users, is floating on the Stock Exhange at a placing price of 100p, writes Diane Coyle. This values the company at pounds 20.2m and puts it on a price- earnings ratio of 123.5 for the year to 30 April.

Unipalm is raising pounds 5.4m after expenses to repay borrowings and increase spending on a new product, Pipex.

Unipalm has two branches. The original business sells networking software that allows different computer operating systems to communicate. The other, Pipex, connects customers to Internet, a worldwide network of more than two million computers. It has traded at a loss and will continue to do so for some time. Peter Dawe, managing director, said he expected demand for Pipex to rise sharply. 'We want to meet that growth rather than going for profits now,' he said.

Founded in 1986, the group made profits before tax of pounds 605,000 on sales of pounds 8.4m in the year to 30 April 1993. It forecasts a fall in profits to pounds 250,000 this year because of the costs of Pipex. The founder directors, Mr Dawe and Bob Williams, are not selling any shares, and will hold 50.1 per cent after the placing. 3i will retain a 15 per cent stake.

Martin Robinson of Henry Cooke Corporate Finance, sponsoring the placing, said institutional applications had been 'heavily' scaled back, despite the rating. Dealings are expected to begin on Thursday.

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