Following the recent announcement that the Racal Electronics group is to sell off some of its non-core businesses, it was announced today at its annual results meeting that it has unloaded its Racal instrumentation businesses on GEC for the sum of UKP31m. The acquisition has been made by GEC’s subsidiary Marconi Instruments Ltd, which now […]
Following the recent announcement that the Racal Electronics group is to sell off some of its non-core businesses, it was announced today at its annual results meeting that it has unloaded its Racal instrumentation businesses on GEC for the sum of UKP31m. The acquisition has been made by GEC’s subsidiary Marconi Instruments Ltd, which now controls Racal-Dana Instruments Ltd, Racal-Dana Instruments Inc and Racal Automation Ltd, which between them have net assets of UKP18.4m. Racal’s highest profile business at present is Racal Telecom Plc which saw turnover grow by 74%. The number of subscribers for this company’s cellular telephone business has increased by 140,000 over the past year, and by March 31 totalled 300,000. Racal Telecom’s capital investment of UKP95m has mainly been channelled into the Vodafone service, which now reports (thanks to monitoring with Ericsson software) an average 93% success rate on all calls made. Over the past six months cellular traffic has increased by 30%, and the company has focussed on improving services at its Brentford switch to ease bottlenecks on the M25 at peak times. Over the coming year it is promised that Vodafone services in the provinces will be improved. Capital investment in 1989-90 will total at least UKP125m which will go towards setting up the cellular service in Malta, the packet radio joint venture with Cable & Wireless, and the trunked PMR project, as well as on paging and the European distribution organisation. The group’s other core businesses had varying fortunes: Security its biggest revenue earner performed well with sales up 24% at UKP527.8m and the coming year looks strong as US companies show an interest in the electronic monitoring of prisoners, but Racal is hoping for improved margins. Data Communications, on the other hand, saw revenues rise a disappointing 11% to UKP286.1m. In future this sector will concentrate on networking and systems rather than on product-based sales. It will, nevertheless, remain a core business which together with Racal Telecom and Security contributes 66% of the group’s turnover and 85% of operating profits. All other businesses are up for review: Data Networks appears to be relying on government contracts for growth, but then it was formed on the back of the Government Data Network contract; Radio Communications is treading water with a turnover hovering around the UKP112m mark; Defence Radar and Avionics had a difficult year and saw overall margins reduced by 2% – negotiations are currently under way to find a partner to shoulder this business; Marine and Energy, however, had a good year with operating profits almost doubled. Meanwhile Specialised Businesses bombed with Racal-Redac reporting trading losses, Racal Acoustics seeing a cut in profitability, along with the furniture manufacturer Gispen & Staalmeubel. This last company is, unsurprisingly, now up for sale. Lastly, corporately funded Research and Development has been set up as a division independent from Specialised Businesses. No further details about the sale of Racal companies were forthcoming – needless to say the financial outlook for the two Racal companys’ coming year is good.