Survival crisis for software supplier

May 16 2008 by Graeme King, The Journal

SOFTWARE supplier Newcastle Computer Services (NCS) has gone into administration, with the immediate loss of 30 jobs.

NCS, based in Ponteland, had employed 53 staff nationwide, but administrator Joe McLean of Grant Thornton acted swiftly to cut the company’s cost base after being appointed on Tuesday.

Now Mr McLean is aiming to sell NCS as a going concern, to retain the remaining jobs, and keep the business afloat.

The company has been trading as Turning Point Innovations (TPI) for the past 15 months, after acquiring Turning Point Technology early last year.

NCS’s main business is selling computer systems to graphics-based industries, and is a distributor of software packages such as Dalim and Xinet, which are widely used in the print industry.

NCS’s current state is particularly unfortunate given the growth plans announced at the time of that acquisition.

The business then employed around 90 staff, including the newly acquired Turning Point, and had plans to create more jobs in Northumberland.

Sales director Tony Newton said then that the business would be aiming to more than double its annual sales from £14m to £30m over a four-year period.

But now those goals appear a long way off, with Mr McLean in charge of the business and seeking a buyer. NCS was due to file its accounts at the end of this month, but it is not yet known whether the calculations required for that were a factor in the decision to call in the administrators.

Mr McLean said: “I have only been in office less than 48 hours so it is very early days, but I am preserving the business and it continues to trade under my control while I seek a buyer.

“I have been in good contact with a couple of parties already, so I would be hopeful that a party will come forward relatively quickly to take on the business.

“The co-operation from everybody so far has been first class.”

Mr McLean said the 30 job losses had come across the company, including staff who worked from home and from a small office in London.

Last February, Mr Newton said: “The combined business will turn over £14m and we would hope to have that up to £18m in the next 12 months.”

He said the company hoped to then achieve 10% year-on-year growth for the following three years.

He said: “Our scale will then make it very difficult for our competitors to stay with us, so we imagine we would pick up some other businesses along the way. Through a combination of organic growth and acquisitions we are looking at £30m worth of business in the UK.”

NCS Supplies, which recently sold its offset division to Litho Supplies, is unaffected by the announcement.