Geac Reports Flat Q1 Amid Acquisition Spree

Computergram International, Sept 16, 1999

Geac Computer Corp posted net income of $38.3m in its first quarter ended July 31 on revenue that rose to $202.5m from $173.5m in the year ago period. Canadian Geac an international provider of hardware and ERP software for corporations, financial institutions and libraries, reported earnings before income and taxes of $51.7m compared to $46.8m last year. But it was hit by a tax rate hiked to 24% from 15% in 1998 and net income per share stood at $0.63 - the same as last year.

Geac has been in acquisition mode this year and in the summer swooped for troubled UK-based ERP vendor, JBA Holdings Plc to double its size to an expected annualized revenue of $1.3bn. Geac struck with JBA's stock price standing at 227.5 pence (around $3.67) - depressed by a slowdown in sales of ERP software. But the Markham, Ontario-based outfit saw its own stock market value cut by a third in February after issuing a profit warning on its third-quarter results for fiscal 1999.

As well as assimilating JBA into its organization Geac will have to find a place for three other purchases closed in the last two quarters. The firm acquired publishing systems firms, Cybergraphics Solutions from Australia and UK-based Matrix Systems in the first quarter. In addition, JBA took on board financial and human resources systems from Atlanta-based Clarus Corp this quarter. Geac said it would spend the next few months valuing the goodwill or premium paid for JBA above its asset worth, and assess the time period over which this extra cost should be amortized.