A turnaround from loss to profit at its automotive product group has enabled Welsh electronic components and systems supplier AB Electronic Products Group Plc, to raise pre-tax profits more than 100% to UKP16.4m for the financial year ending June 30. Last year’s losses for the division were blamed on the expense involved in building a factory to supply electronic components for the new range of Jaguar cars. AB Automotive has recently won contracts from Opel, Audi and Volvo, and the division’s had sales of UKP36m, or 18% of total business, this year. Speaking at the announcement of the company’s end of year figures (see Company Results) chairman Peter Phillips predicted that compared with 1980 the value of automotive electronics in cars will increase more than fivefold by the 1990s. The two largest of AB’s five product groups – the components product group and electronic assembly product group – also performed strongly, according to Mr Phillips, and provided the largest profit contribution. The components group, whose products range from connectors to thick film circuits and sensors, accounted for 23% of business. The division acquired wiring harnesses manufacturer Swansea Industrial and Plessey Connectors, which makes circular connectors for marine and aerospace environments dring the year; while ICI Stratos, which manufactures fibre optic connectors for telecommunications applications, was bought for UKP2.5m cash after the fiscal year ended. Mr Phillips said overall turnover would have been higher but for many assembly contracts where companies chose to supply parts themselves. The assembly division’s turnover for the year was UKP81m, representing 41% of total sales. It also managed to widen its international base through a strategic alliance with US-based Flextronics Inc, which has operations in the Far East, including mainland China. The chairman said he expected continued growth in this market, which is expected to double in size over the next five years, due to the short life-span of many of the products. At UKP21m, aerospace and defence sales were down, primarily due the decision to withdraw from Kenya, which led to an extraordinary charge of UKP994,000. The only black spot was telecommunications which experienced a disappointing rate of expansion and saw an unspecified loss for the year on turnover of UKP16m. It will be difficult for AB Electronic to repeat this performance as operating margins have increased dramatically in the last 12 months: Mr Phillips seems to agree and predicted further but less spectacular growth this year.
