ICL to Outline Flotation Plans

Computergram International, May 11, 1999

ICL Plc, the European services arm of Fujitsu Computers, will include details of a planned year 2000 flotation of between 29% and 49% of its shares on London Stock Exchange in its May 25 financial report. The details have been anticipated since March last year, when CEO Keith Todd said the flotation, which Fujitsu had originally said would come within five years after its 1990 acquisition of the UK company in 1990, would definitely not be postponed beyond 2000. Fujitsu is thought to have dragged its feet as it waited for the formerly diversified hardware and systems manufacturer to achieve a respectable market value.

As it is, the float is expected to generate around two billion pounds ($3.2bn). However, ICL may struggle to realize this if margins remain as thin as those reported in 1998, when revenue of 2.48bn pounds produced only a 10.8m pound profit. At the time the company said the figures were distorted by the its ongoing metamorphosis from computer manufacturer, to IT services company. This process is now complete, and ICL has since won a number of high-profile contracts, particularly in the UK public sector. However, perhaps the most prestigious, and potentially profitable of these is now hanging in the balance with ICL set to lose an estimated $325m of its own money if the UK government scraps its Pathway Post Office counters automation project (CI No 3,655).

The effect of any loss connected to Pathway will not appear in the 15-month figures ICL is due to publish this month as it moves to bring its reporting in line with parent Fujitsu's.