Graseby Plc, the London WC1-based electronics group which is better known as Cambridge Electronic Industries (CI No 1,829), is encouraged by its financial performance in 1991, during which pre-tax profits rose 34% to just over UKP10m on revenues that slipped 10% to just over UKP107m. In anticipation of a reduction in some of its defence markets, Graseby has decided to rationalise activities to protect the profitability of these businesses. It expects any moves in that direction to incur UKP1.6m in costs, and this provision has been included in the profit figures as an exceptional item. Also included in the 1991 figures is an extraordinary loss of UKP2.6m relating to UKP1.4m writedowns on trade investments, acquired as part of the consideration on the disposal of Bepi Circuits and MTL Microtechnology in 1989, and business closure and disposal costs of UKP1.2m. Dividends cost UKP6.8m, leading to a deficit of UKP2.3m for the year which forms part of a reduction in shareholders’ funds of UKP13.3m. The remaining UKP11m, chief executive Paul Lester reports, was primarily the effect of writing off goodwill on the Tace and Goring Kerr acquisitions. Gearing at December 31 was 67%, which the company says it expected. Environmental and defence is the group’s largest activity, contributing UKP7m profits on UKP40.5m sales – up 82% on 1990, boosted by increased sales of Graseby’s new computer-aided manufacturing chemical agent monitors, which started shipping in the second half, and also by a five-month contribution of over UKP2m from Tace. Instruments is the second largest, with UKP2.5m profits on UKP23.5m sales; manufacturing service was third with UKP1m earnings on UKP21m revenues. The last was the only division that failed to increase turnover. As expected (CI No 1,742), Graseby disposed of more businesses in the second half – Cathodean and Cathodean Sinclair, and discussions are underway for the proposed sale of Graseby Ajax and Graseby Flexitech to the management – the last two have net assets of UKP1.5m and UKP1.9m respectively. Through the purchase of Tace, Graseby has got its hands on a 20% interest in Sampling Technology Inc and a 15% stake in Plastic Systems Inc. The group has reorganised its corporate structure in the US, to take advantage of tax losses of around $15m built up over the last few years. Graseby’s research and development spend was up at UKP5.6m, from UKP3.7m, and an additional UKP2.4m of external research funding has been brought in. The only explanation offered for the adoption of the bland name Graseby is that it is part of the group’s process of becoming more market-oriented.
