National Transcommunications Ltd, the privatised engineering arm of the UK’s Independent Broadcasting Authority has confirmed that it is likely to seek a flotation early next year. A spokesman said that a firm decision is expected shortly. The Winchester-based company was spun off in October 1991 and bought by Mercury Asset Management (CI No 1,789) which has been managing it for a group of institutional investors ever since. Now that the statutory three years has passed, the group can be floated – and is keen do so since it says that business outside of its regulated television transmission work has grown faster than anticipated. It is expected to have a turnover of UKP90m next year, and to make around UKP15m of profit. The non-traditional business now accounts for 40% of its turnover and is expected to grow to 50% next year, says the company, a figure that was not targeted until 1995 in the original business plan, according to the spokesman. Most of this new business comes from its System 2000 video compression system which is sold to both cable companies and programme makers. The technology uses MPEG compression to double the capacity available from each satellite transponder. Transcommunications styles it as the first broadcast quality MPEG offering, based as it is on electronic developed in-house by the company. One of the biggest orders came from Filmnet, the European satellite television operator, which placed an order worth UKP2m for compression kit with Transcommunications and US partner Scientific Atlanta Inc. Meanwhile the traditional income from running ITV’s network is flat, or even diminishing since the Office of Telecommunications is holding prices down to one percentage point less than inflation. Though the compression business is growing nicely, the company admits candidly that its window of opportunity for System 2000 is limited to just a couple of years. Once MPEG chip sets are available in commercial quantities, its technological lead will disappear very quickly. The other main growth area at the moment is the company’s satellite uplinking business, and the potential for future revenue must be more speculative. One potential money-spinner it points to is digital television, due to become a consumer reality around 1995. This will see a fundamental shift in receiver technology and transcommunications hopes to sell its expertise to manufacturers – the Japanese electronics firms have been heavily committed to analogue high definition TV until recently, the company points out. Both Cable & Wireless and GEC Marconi were firmly pegged as potential buyers at the time of the original sale.
