Eurotherm International Plc has turned in a record result for the half-year period to April 30. Pre-tax profits rose 46.7% at UKP6.7m, with an improvement on sales of 0.8% at UKP78.1m. The industrial automation group has been struggling for economic recovery for a long time, but is now confident that prospects are good. Despite a depressed market, it states that profit increases were achieved by careful cost management, the creation of a strong product portfolio and the concentration of resources on more profitable areas of business. Restructuring carried out last year was said to have resulted in shorter lines of communication and a stronger focus on product profitablity. This, it was claimed, counterbalanced the impact of a general cut-back in larger capital investment. Orders held up well and a growth in volume was seen in the sale of new products. Nonetheless, overall order prospects are reported to be flat, although some variations do exist on a geographical basis. The US showed some minor improvement, as did France, Italy and the Benelux countries, but orders in Germany fell and the UK remained largely static. However, research and development costs are to be kept at more or less the same level as last year; approximately UKP4m at the half-year stage, but about UKP8.5m for the year overall. Investment is to be focused on those areas that yield the fastest returns. In effect, this means that the company will be taking no risks. Instead, it intends to concentrate on developing existing product lines, rather than branching out into anything new. The balance sheet was strengthened, with gearing reduced to 25%, down from 33% last time, and cash flow is expected to remain positive for the rest of the year.
