Pegasus finds profitable wings

PEGASUS, the USM-quoted financial software company, said it had reached a turning point, with profits before tax and exceptionals up to pounds 783,000 in the year to 31 December 1993, from pounds 283,000 in the 17 months to 31 December 1992.

It also made an exceptional profit of pounds 6.1m from the sale of its computer forms arm. Although this was the company's only profitable business, Jonathan Hubbard-Ford, chief executive, said Pegasus was too small to continue to compete effectively in that area.

Turnover on continuing operations fell by a quarter to pounds 4.9m. The company's core software business, accountancy packages for small to medium-sized companies, made losses.

Pegasus is resting its hopes on a new series of packages, due to be launched towards the end of the year. The company also plans to increase the proportion of its revenues made from annual licence fees rather than new sales. It said recurrent revenues should reach 15 per cent of the total in 1994.

Mr Hubbard-Ford said Pegasus, which has net cash of pounds 8.3m, was investigating an acquisition as part of its long-term strategy of extending its packages beyond accountancy into other functions such as manufacturing or sales. He said it was difficult to predict current-year profits, but he would 'be comfortable if we break even'.

Sue Cox, an analyst at SG Warburg, said: 'It has been a period of fundamental change for Pegasus. We will have to see how well the new product does.' The shares closed 10p down at 220p.