Telecommunications equipment manufacturer Telspec Plc has reported its first results since its flotation last December. For the year ending December 31, the company reported a net profit up 14.5% to UKP2.326m, although turnover dropped slightly to UKP17.6m. Pre-tax profit was UKP3.4m – a little better than the forecast of UKP3.3m set out in the company’s flotation prospectus. Operating profit was down 6% to UKP3.168m, and gross profit also declined, by 11%, to UKP5.28m. But while Telspec Europe performed well, the company’s Australian operations experienced a decline in turnover to UKP3.9m, compared with UKP5.9m last year. The company attributes this to a drop in sales to Telecom Australia, but says it expects Telecom Australia to increase orders again as the country’s economy recovers. However, Telspec Australia has recently won orders in Australia and Southern Africa to supply pair gain equipment. The company has also upgraded the manufacturing capacity of its Melbourne plant. Offsetting this decline in Australia, Telspec Europe performed strongly last year. The company received a record order in December from Deutsche Telekom for UKP7m-worth of pair gain equipment. Telspec Europe has also entered into a joint venture agreement for the manufacture of its products in Slovakia. This joint venture, Telspec Slovakia sro, has won a UKP3.5m order for pair gain equipment from Slovak Telecom. Telspec is also increasing manufacturing capacity at its Rochester, Kent, facility, to cope with expected increases in orders. Around UKP400,000 was spent on capital equipment during the year. As for products, Telspec says it expects its pair gain and line concentrator systems to remain its most important products, and says these will be developed further. But 1993 saw the first order for the company’s digital network grooming switch, as well as the development – in conjunction with Northern Telecom Ltd – of network terminating units designed for use in optical systems for the local loop. According to chief executive Garth Riley, Telspec has significantly expanded its marketing efforts in the last year, and the order book is reflecting this – it currently stands at around UKP31m. Riley warned that strong competition is putting pressure on margins, but predicted that increased market share volume would offset this. As the company warned in its flotation prospectus, no final dividend is to be declared for the year. However, Riley said Telspec intended to declare an interim dividend for the six months ending June 30 1994, to be paid in October this year. Telspec Plc was floated on the London Stock Exchange last December via a placing, at a price of 160 pence per share. The share price is now 280 pence, representing a rise of 75%, and valuing the group at UKP88.8m.
