ICL Plc saw modest revenue growth of 5.9% to UKP2,600m for the year to December 31 1993, with pre-tax profits down 39.4% to UKP23.4m. Throughout the year the firm continued with its restructuring plan in response to changes in the computer industry and this will continue during the current year. Operating profit before rationalisation costs was down 6.6% at UKP80.2m and rationalisation costs were UKP47.7m this time against a cost of UKP33.9m last time. A similar rationalisation cost is expected next time. Turnover was highest in the areas of complex systems integration and facilities management. CFM, the majority of which ICL acquired three years ago, grew 77%, Eastern European revenues were up 47% while ICL Enterprises grew 41% and retail business 17%. Profit margins have fallen as the firm has shifted focus towards services and because of strong competition. As part of its objective to conserve cash during the year, the one-for-seven rights issue in November, supported by parent company Fujitsu Ltd, raised UKP50m which was used to reduce the group’s borrowings. When Fujitsu exercises the warrants entitling it to take up an equal number of shares in 1994, its shareholding will rise to 84%, the balance being held by Northern Telecom Ltd. Combined with a net cash inflow of UKP43m, gearing at the year end was reduced to 18% and total borrowings were UKP51m. Operating costs have been reduced by UKP100m through the sale of non-core activities and a policy of devolved management. The company gained UKP13m by selling its 50% state in Electronic Data Interchange company INS Ltd. Profit after tax was down 80.9% at UKP5.4m after a tax charge of UKP18m this time compared with UKP10.4m last time, an increase the firm says results from the mix of losses and profits in its different territories. Net interest charges were up 14.5% to UKP25.2m, affected by the cash phasing of the rationalisation programme and profit generation, and with a higher rate of working capital during the year.

Multimedia

In the Industry Systems business stream ICL won a contract to supply a total system to La Rinascente, an Italian retailer, while in the travel industry it won contracts with SNCF of France, KLM, and for the provision of equipment for the Channel Tunnel. In the services sector it won a contract with American Airlines in association with Bell Atlantic Corp and the Sorbus joint venture, which covers 23,000 travel agencies and 42 airlines. In the third sector, the technology business ICL anticipates growth in multimedia business applications over the next five to 10 years and in conjunction with Fujitsu will be investing in the development of such applications. The company spent a total of UKP209m or 8% of revenue on research and development during the year, down from 9.8% last year. As far as flotation goes, it remains on the cards and is supported by the shareholders (Northern Telecom wants out). However, ICL says it still has more restructuring to undergo. It also depends upon market recovery in terms of computer stocks, so flotation may not now happen for another two to three years. There are no specific acquisitions in the pipeline at present, although in line with a desire to concentrate on expansion of the services business, the financial sector and manufacturing, relevant acquisitions have not been ruled out.