Ferranti International announced a desultory performance for the year to March, with pre-tax profits down 18% to just under UKP56m on turnover that rose 28% (bolstered by the 1987 acquisition of International Signal & Control Plc) to UKP1,053m. These disappointing results were attributed to three main factors: firstly, in the civil computing division turnover was […]
Ferranti International announced a desultory performance for the year to March, with pre-tax profits down 18% to just under UKP56m on turnover that rose 28% (bolstered by the 1987 acquisition of International Signal & Control Plc) to UKP1,053m. These disappointing results were attributed to three main factors: firstly, in the civil computing division turnover was down by a third on what Ferranti expected it to be with a rapid decline occurring in the fourth quarter. As a result the company is withdrawing from printing and composition systems, and its personal computer and terminal business in the industrial sector. The civil and defence computing production factories are being merged togeth-er and, consequently, Ferranti’s site near Manchester Airport will be sold. This rationalisation plan will incur approximately 700 job losses and create 200 new posts. Under these measures some restoration in profitability in the civil computing division is expected during the current financial year, but real growth will probably not be seen for another two years. Secondly, Ferranti Computer Systems incurred costs of around UKP10m in research and development, while, thirdly, a further UKP10m was lost in problem contracts. High interest rates also contributed to Ferranti’s difficulties, but currency fluctuations were not a problem. Phone Zone Meanwhile, Ferranti’s trading prospects don’t look too hot with an order book at about the same level at the beginning of the current year as it was at the beginning of last year. However, Ferranti’s chairman Sir Derek Alun-Jones seemed reasonably optimistic, saying that the company’s future lay with radar and navigation equipment, as Ferranti continues patiently to await the contract for the European Fighter Aircraft radar; total ship systems, a market where it is currently touting its CS500 command system; within Ferranti Computer Systems, process control and information display systems are the areas where investment is being made, while missile technology including parts of the US SDI project is also a patch that Ferranti hopes to call its own. And then, of course, there’s Telepoint. Well, Ferranti is adamant that its long overdue baby will finally be launched into the world (well leastways the London area circled by the M25) in the next few weeks, with Phone Zones already agreed with the Automobile Association, Granada Service Stations, Mobil Oil, the Bank of Scotland and Trusthouse Forte. The system will not be given a public push, however, until it is up and running. By the autumn Ferranti expects to have a 1,000 Telepoint sites operational, and the whole system should be profitable within two years. Mean-while, as part of the larger corporate plan, further strategic alliances are being sought such as the deal with Aeritalia which subscribed for 50% of two Ferranti subsidiaries Elmer SpA and Laben SpA in March. But a major deal involving the exchange of Ferranti shares is not under negotiation at present and no direct acquisition approaches have yet been made. At the moment Ferranti’s turnover is split 72% defence, 28% civil – a split that Sir Derek said he was happy with. Asked about the Gorbachev initiative, he replied that he took the long sweep of history view about the defence industry, believing it will exist for a while yet.