The Age from Melbourne, Victoria, Australia • Page 14

BUSINESS THE AGE MONDAY 29 SEPTEMBER 1997 In Profile FRED MILGROM Innovator keepsfiring Securttjes AGM (Syd); Hona Kong i Adelaide Share Investments AGM Product ExMbWon begins, Mefcourne Mtswa txpnraoons aum ujnvenoon ana txrooroon gentre. "3); Bar o( Melbourne gen Joonomy -l ,1 Mi Shearer Holdings AGM (SA); ABS issue Australian national (PkJmm Capital AGM (Syd); (June), International trade vj Property Trust AGM (Oris); VorH In goods and services (Aug). 3 Tuesday While living in London, Mr Milgrom, who had experimented with the huge mainframe computers at Melbourne University, discovered the first affordable home computer. With its pitifully small lk memory (today's pocket calculators have 48K), Clive Sinclair's ZX 80 revolutionised Mr Milgrom's life. He had the opportunity, for just 100, to combine his publishing which in turn 'sold it to Richard Branson's Virgin Group.

The name Beam is an amalgam of Mr Milgrom's initials and the first two letters of his wife's maiden name. The move home coincided with a revolutionary Beam game, "Way of the Exploding the precursor to the action-packed computer games kids play today. By 1987, Beam's games were licensed in Europe and the United States so Mr Milgrom decided to take a look at Japan. But breaking into the Nintendo market proved difficult, mainly because the Japanese company hard-wired the games. Beam then became a third-party supplier to US I a him ABS Issues Australian economic indie atore (Oct), labor force data (Aug), actual and expected private' mineral exploration (June), retail trade (Aug), building approvals -vk (Aug), monthly summary of statls- tics, NSW, Qld, WA (Sept), ecortom-ks indicators.

NSW (Sept). BT Hotel Group AGM (Syd); Cooardie Gold AGM (Syd); I Entertainment World gen (Melb); PA Property Trust AGM (Perth); Wattle Gold Mines gen (Perth); Southcorp Holdings' managing director, Mr Graham Kraehe, addresses a Securities Institute lunch, 'Managing the Growth Hotel Sofitel (Melb); AICDKPMG Boardroom Report released. Wednesday skills with his interest in compul ers and his scientific background. With his programming experience, he wrote a book for users and about 30 programs for the ZX 80, which were sell-outs. After a summer break with US Federal Open Market Committee; meets on Interest rates (Washington).

his family in Australia, he returned to London in March 1981 with two new programs for the ZX 80. But he found software nouses, which had the vast financial resources required to build games into Challenges', begins (Newcastle); BankWest interim results. that Mr Sinclair was about to introduce his next generation computer, the ZX 81. Mr microchips. Free ASX lunchtime lecture, "The Economy and What to Watch" (Melb); Australian Business Conference on "Solutions to Global1' US Conference Board reports on leading economic Indicators (Aug).

Milgrom's work had become totally redundant. "I learnt two things from that experience," he says. "One was that computer software was an interna Thursday boon Beam was producing, under licence, global games for Playstation, Saturn, Sega CD, Super Nintendo and the Internet. "Prior to being a public company, we were primarily a developer of contract titles," Mr Milgrom says. "We were the contract manufacturer, the bottom of the food chain." The float, which had no underwriter, funded the company's ambi tional market, and the second was that platforms change really quickly." He sat down and wrote a user's guide to IT TOOK Alfred "Fred" Milgrom 20 years to become an overnight sensation in the computer software entertainment business.

But judging by Beam International's share price, the financial markets still view him as a high-risk, fly-by-night nerd. Nothing could be further from the truth. But the recent difficulties of Sausage Software and Network Entertainment, which listed about the same time last year as Beam International, have left investors with no taste for multi-media stocks. Beam last week reported a maiden profit 4 per cent above its prospectus forecast on revenue growth of 137 per cent. Even so, the company's share price is languishing at 49 cents after debuting at a 25-cent premium of 64 cents.

"How do you get momentum going and increase liquidity?" Mr Milgrom asks. "The stockmarket says it doesn't understand technology stocks. But I try to explain we are not a technology company, we are an entertainment company." Mr Milgrom, whose company has a catalogue of more than 100 computer games, including some best-sellers in more than 20 countries, has a track record of creating visionary and successful electronic entertainment. Three years before the personal computer industry embraced commercial software, he had already bought the worldwide computer publishing rights to the J.R.R. Tolkien classics The Hobbit and Lord of the Rings with a view to turning them into electronic games.

In 1983, The Hobbit game became No.l in Europe. Its sales exceed 500,000 units. When Mr Milgrom started his first business venture, Outback Press, in 1975 after graduating from Melbourne University with a science degree, one of his first publications was Elizabeth Jolley's first novel. Ms Jolley went on to become one of Australia's most celebrated and enduring authors. Mr Milgrom then moved offshore to pursue his book-publishing career he says the restrictions on trading book rights had made publishing in Australia prohibitive.

His United Kingdom-based company, Melbourne House, published several books that were ahead of their time, including the UK's first title on sexual harassment. Cudgen RZ AGM (Bris); Garrat's AGM (Syd); Golden Deeps gen (Perth); Docklands Authority's chief executive, Mr John Tabart, address Hyatt (Meto): Unifoods' chairman and Unilever's national manager, Mr Enzo Allara, addresses an AICD lunch, Grand Hyatt (Melb). World US factory orders (Aug). ees a Property Council lunch, Grand Friday the ZX 81, and Melbourne House stopped publishing "normal" books to specialise in computer books and computer games. At that stage in their development, computer games had Resources EGM (Perth); Netcomm World i US non-farm payrolls (Sept).

Companies Apoilo Batteries AGM (NSW): Equity and Property Investment Corp AGM (Melb); International Mineral i i bstweek tions, enabling it to commission and finance new tides with greater profitability. Since the float Beam has made the transiuon from software developer to publisher in its own right, with stronger returns on sales of its games. To game players around the world, Beam's latest title "KKnD or Krush KillNDestroy" developed Dow Jones AllOrds 2780 Pts I 8025 Pts after the tloat is considered to be the world's best strategy game, it has been sold in 20 countries. 1 -x 'f 'A! 'v men If v-f to be simplistic. About the most complicated English sentence a game could handle was "Open "Get axe" or "Kill With Mr Sinclair's next prototype, the ZX Spectrum, a third-generation computer with a 48K memory, games could become more interesting by adding more words.

"I hired some programmers so that we could enter whole sentences in English. No one had done it before. But they didn't tell me we can't do it, so we did," he says. "We did great. We had a booming little company by the mid-1980s.

It had 35 staff in Melbourne and 12 in the UK." With his wife Naomi (they were married in 1979) he moved back to Australia permanently and sold the UK company to Mastertronic, Mr Milgrom has called the new games publishing group "Melbourne House" after his ,7 4 i si first computer publishing business. Maybe he also wants to 1 2740 I 7875 2730 I I remind industry analysts and investors that he has been in the business for 20 years and has plans to stay. by Megan Jones 2720' 7825 19 Sept (dally) 26 Sept 19 Sept (daily) 26 Sept .0 111 MKIJ lWWWlW poumf. Bridge tobttnaUon Systems NM in dance with Axa over access to China market Comment pr TroaceyUM OomHty S24J6 Goktratt 13240 Sensible Share Investing 4. The Goal (2nd Ed) 8.

Managing At The Speed Of Change Conner 4: Zapp! The lightning Of Empowerment 7, The Taxpayers' Guide 1997 1998 Byham $2100 McDonald 3M6 McLaughlin UMS 18. Money for Life McGiH 1 Westpac: The Bank That Carewl2M0 Maister IMJ Little Reed $2M6 UK firm makes bid for Mitec British company Filtronic Comtek pic has announced a takeover bid for Brisbane-based Mitec Ltd, a microwave technology company. Mitec chairman Mr Ted Ranson said the formal part A document was expected to be served tomorrow and he advised shareholders to take no action until the Mitec board of directors met this week to consider the takeover offer. Filtronic Comtek's offer of 85 cents a share valued Mitec Ltd at $15.3 million, Filtron-ic's executive chairman, Mr David Rhodes, told the company's annual general meeting in Britain on Friday. The offer is conditional on it acquiring 90 per cent of Mitec Ltd and gaining approval under Australia's foreign investment legislation.

Mitec Ltd, based at Sinna-mon Park, on Brisbane's westside, specialises in the design, development and manufacture of microwave communications, equipment and systems. Sales last financial year were $19.8 million, up from $18.4 million in 1995-96. AAP Broke The Bank True Professtonalisni -Tyranny of fortune: Australia's Asian Destiny Focus living Company Intellectual Capital From: PAGE B1 NATIONAL Mutual's managing director, Geoff Tomlin-son, will need a career-best performance if he is to get National Mutual into China, despite last week's announcement by the Chinese Vice-Premier, Zhu Rongji, that Australia is in line for the next entry ticket. The Federal Government gave the French group Axa the green light to buy 51 per cent oiational Mutual for $1.1 billion in 1995 on condition that it use NM as the vehicle for expansion in Asia. That deal obviously included China, the biggest untapped insurance market in the world, and NM's 69 per cent-owned, Hong Kong-based National Mutual Asia was already in the queue for a licence, in league with China's Everbright group.

One insurer had been granted a licence at the time. That was AIG, a US-owned outfit that had been booted out of Shanghai after the communist revolution in 1949. NM's directors believed that China licences in future would also go to companies. They were wrong. AIG was a special case, and in May this year, China handed a licence to France, which in turn nominated its premier insurance group, Axa.

Zhu's announcement last week that Australia was next in line suggests again that licences are going to countries, not companies. So MALCOLM MAIDEN where does that leave NM, which is 51 per cent owned by a French company that already has a licence? NM says Zhu answered that question last week by remarking in a conversation that the two contenders for the Australian licence were NM and its Melbourne-based rival, Colonial. If NM gets a licence, it believes it and Axa could occupy different regions of China. NM's independent shareholders will obviously hope that is so, but only an optimist would say it was more than possible. If NM loses out to Colonial, Tom-linson's diplomatic skills will be tested as he attempts to insert his company into a deal that satisfies the Governments of China, France and Australia and three companies NM, Axa and NM's mooted China partner, Everbright.

It is by no means clear whether Axa is friend or foe in this process. Tomlinson says NM's deal with Axa is being honored in practice and in spirit, but the Axa-NM relationship outside China seems to be going the French company's way. NM is the operator of the Asian companies, as agreed, and earlier this year it applied for, and received a licence to establish a life group in Thailand. But Axa and NM also agreed that the Thai group would carry Axa's name leaving NM in the curious position of building and Res deGeus Stewart E-Mytfi Revisited Geoj Tomlinson: Has work cut out for him to get NM into China. 9y mocks Secrets Of Getting A Job Garskje HUB Westpac The Bank That Broke The Rank ISMS Carew tlMB CoMkts i Built To Last Picture: JOHN WOUDSTRA company because of Axa's 51 per cent shareholding, and all of its big acquisitions are examinable.

So too would be any plan by Axa to take its stake in NM above 51 per cent. NM's China prospects are cloudier than they were a year ago, when they were the biggest single lure for investors in the group's sharemar-ket float. But with FIRB in the background Geoff Tomlinson is not totally stymied, even if Colonial picks up the first Australian licence. precedent, and must be considered unlikely. But so too would be FIRB inaction in the face of an outcome that would make it look either unable or unwilling to enforce formal undertakings.

Less overt responses are available if Colonial trumps NM. Axa's willingness to deal NM in to its own licence, or to the financial benefits it creates, could for example be influenced by the knowledge that its life here could be miserable if FIRB is hostile. NM is a foreign owning a network that is promoting another company's brand name. The Foreign Investment Review Board has been running sue-monthly compliance checks on NM-Axa, and is in discussion with NM and Axa about the latest developments. If it believes undertakings have been breached, the Government has the ability to launch legal action, and can even seek jail sentences A response of that magnitude against Axa would be without Tradkig Austratan Futures -Making Money The Keys To financial Success "Adams Moore Clttheroe Covey Adams ft.

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