Gestetner Holdings Plc’s interim results have been overshadowed by Inchcape Plc’s announcement not to exercise an option to lift its stake to 25% from 15.3%, and Gestetner’s shares sank 14 pence to 149 pence out of disappointment. This comes as surprising news as gossip suggested that Inchcape was hungry for more of the office equipment group. It made a strange herald for Gestetner’s return to profitability, with a pre-tax profit of ?6.6m for the six months April 30, against ?45.2m loss last time after restructuring charges of ?41.0m. Trading conditions continued to be difficult in office automation, which accounted for 83% of turnover, and photographic markets, 17%, and turnover slid 3.2% to $482.3m. However the group has begun to benefit from its restructuring last year and trading profit of ?14.1m was 21.5% better than last year, up 41% in constant terms. In the office automation sector, of which 69% is related to copiers, lower gross profit margins were compensated for by lower operating expenses and pre-tax profits, after restating 1993 results at average 1994 exchange rates and excluding last year’s restructuring charges, rose 21.7% to ?16.8m and turnover, increased by 2.2% to ?401.2m. Turnover in photographic products was adversely affected by the disruption caused to the Vivitar business by the Californian earthquake, dropping 5% to ?81.1m. Vivitar has since been relocated and costs incurred will be mostly covered by business interruption insurance. The group also confirmed a switch to a calendar year-end from October 31, following a resolution by capital shareholders in March. From 1995 onwards, the half year end date will be June 30. As to the future, chairman David Thompson is less than ebullient, seeing one or two encouraging signs of improvement in the sales picture but believing it would be wrong to expect significant short term growth in our major markets. Hence he looks to more cost-cutting to increase our trading margins further. The interim dividend will be 1.2 pence.
