Torex Revenue Boosted by Medical Deals

Computergram International, August 13, 1999

Torex Plc, a UK-based systems integrator, is emerging as market leader in the supply of computer systems to general practitioners and the company is hopeful it can play a "major role" in implementing the 1bn pounds ($1.6bn) to be spent on primary care systems in the UK over the next six years.

Around half the revenue of the Whitney, Oxfordshire company has come from a small but profitable niche in the supply of systems for the retail trade. But an acquisitive approach to the medical markets has put Torex in a position where it reckons to have 30% of the primary health care medical market, ahead of the 25% that it believes is held by its nearest rival, privately-owned Leeds, Yorkshire-based EMIS.

In the six months to June 30, net profit rose a modest 6.2% to 1.2m pounds ($1.9m) after amortization of goodwill in relation to acquisitions and higher interest charges to finance the increase in business added substantially to costs. But revenue, with only a 560,000 pounds ($907,200) contribution from acquisitions, was up 96.6% at 18.5m pounds ($29.7m).

The shares climbed 7% to 280 pence after chairman Chris Moore said that profit in the second half would exceed those in the first six months and will reflect an "increased rate of growth."

The strength of the medical side means that Torex will soon derive around 40% of revenue from this source, a similar portion to retail. The remaining 20% coming from services, primarily hardware maintenance for systems installed by the other two divisions.