Cray Electronics Holdings Plc has no designs on Racal Electronics Plc, in its entirety or any of its divisions. This was confirmed by group finance director Jeff Harrison, as the group, now headquartered in Frimley, Surrey reported an increase in profits and turnover. In the six months to October 31 pre-tax profits were up 29.2% to ú10.1m, while turnover increased by 35.7% to ú135m. The rumours of Cray’s interest in Racal centered on the latter’s big operations in the US, and Cray’s desire to increase its growth there. But since preliminary talks between the two ended, Cray has signed strategic alliances in the US with Digital Equipment Corp as well as numerous value-added resellers. Harrison feels that Cray can grow well enough in the US without the Racal business, and anyway, Racal would want too much for the parts of the business in which Cray might have been interested. Of the total turnover of ú135m in the half-year, ú55m was generated outside the UK. Cray is aiming for a better balance, and is looking to increase its export volume and foreign business to between half and two thirds of its turnover.
Opened new offices
To this end the company has restructured its Cray Communications business in the Asia-Pacific region, concentrating the operations in Australia, rather than reinventing the wheel several times over, as Harrison put it, in separate regions in an area that views itself as a homogeneous market. The division has signed strategic alliances with British Telecommunications Plc for the sale of local area network products, ICL Plc for Frame Relay products worldwide and Comnet Pte Ltd to distribute all Cray networking products in India. It has also opened new offices in Germany, Switzerland, Belgium and Spain. The company has launched several new lines, including a voice Frame Relay product, a fast switched Ethernet product and new Asynchronous Transfer Mode versions of its local area network hub and Frame Relay products. The company has also launched, in the US, what it claims is the world’s first wide area network hub. Cray Communications currently claims to be the number one supplier of digital wide area network products in Europe and remains number seven in the local area network field, according to Dataquest’s figures. The Cray Systems division accounts for 26% of the group’s business, and has enjoyed 13% growth in the most recent half. It has announced two new contracts totalling ú1.6m to supply airlines – a software contract with American Airlines and an equipment deal with Greece’s Olympic Airways, and continues to win orders in the finance, aerospace, travel and telecommunications fields. The fastest-growing sector for Cray is that of facilities management, while government business accounts for the largest share. The division includes the previously loss-making P-E Systems – part of P-E International Plc, acquired in September 1993 (CI No 2,263) – while the management consultancy arm of P-E was launched as a separate division of Cray Electronics. P-E has finally made a modest profit of ú200,000, from turnover of ú17.6m, and Harrison is confident that business will continue to grow. Overall the expectations are for further growth and increased profits in the second half. The company is proposing a 33% rise in the interim dividend to 100 pence.
