London, W1-based office equipment company Gestetner Holdings Plc predicted well in saying that its performance in 1992 would depend largely on the contribution of Nashua Corp’s Nashua Office Systems international operations, acquired in April 1990, and of the company’s photographic division, which is this year contributing its first full-year results. Pre-tax profits for the first six months were flat at UKP22m on sales that rose 13% to UKP451m, results at which chairman Basil Sellers does not hide his disappointment. After adjusting for currency translation effects, sales contributed by the office systems division increased by 35% to UKP372m, this being the area impacted Nashua’s inclusion. Recurring service and supplies revenues accounted for 48% of this division’s sales, up from 47% last year. Trading profit rose 18% to UKP31m, as net margins fell to 8.4% from 9.7% after an increase in the expense-to-sales ratio. Sellers attributes this effect to over-optimistic budgeting for organic growth, and UKP3m in property closure and redundancy costs at Nashua as Gestetner tried to cope with the recession. Some 490 employees were given notice – a 5% staff reduction since November, leaving just under 9,950 employees, a number that is expected to be further depleted before the year end. By country, the UK turned in trading profits down 51% at UKP4m on sales that rose 8% to UKP43m; continental Europe accounted for UKP18m profits, up 10% on the previous year, on sales up 36% at UKP235m; the US contributed UKP7m trading profits, up 100%, on revenues up 15% at UKP97m; Africa, Asia and Australasia, in turn, added UKP4m in profits, down 14%, on sales up 6% at UKP76m. In Gestetner’s largest single product group, copiers, unit sales almost doubled in the first half, thanks to the inclusion of Nashua. The consumer photographic division – 66% dependent on photographic hardware sales – was adversely affected by the recession and the Gulf War, which discouraged recreational travel. Trading profit plunged to UKP1.8m from UKP6m on sales down 15% at UKP79m. Net bank debt now stands at UKP77m, up from UKP39m at October, the increase being due mainly to overstocking. The plan is to eliminate group borrowings altogether by the year end. Analysts had been forecasting a substantial fall in profits so the market reacted favourably to what were seen as better than expected figures, and the shares responded with a 12 pence jump to 170 pence – but they were trading at 200 pence six months ago.
