Basil Sellers, chairman of Gestetner Holdings Plc, the London, W1-based office systems group, says the poor results can be blamed largely on late reaction to recession. True to its October warning (CI No 1,791), pre-tax profits slumped 57% to UKP22.5m on sales up 4% at UKP898m. Delay in reacting to the European downturn forced it into a more widespread, and more expensive, cost cutting programme than had been anticipated. By the interim stage, 490 staff had given notice, leaving 9,950 employees; the number has fallen further. The silver lining to the thunderous black cloud, says Sellers, was Ricoh Co Ltd’s decision to buy into Gestetner earlier in the year (CI No 1,791). The Japanese photocopier and office systems company, which bought its 24.2% stake in Gestetner from controlling shareholder AFP Group Pty Ltd, has a huge annual development budget – totalling some UKP250m, which secures for Gestetner access to up-to-date office technology. Net bank debt is down to UKP26.5m from UKP39.4m over the year. Shareholders’ funds increased by UKP90m through the excercise of options by AFP Group, generating UKP12.3m and conversion of Ricoh of its holding of unsecured loan stock amounting to UKP78m. Including the remaining convertible unsecured stock as debt, Gestetner’s debt-to-equity ratio has improved to 26% from 96%. AFP Group is about to undergo a restructuring, subject to shareholder approval, and the company will be renamed Chiltern Capital Plc.
