Cellnet Cellular Radio reported a dramatic drop in its interim results yesterday – pre-tax profits at the mobile network operator were down 61% to UKP8m compared to UKP13.2m last time. Cellnet is 40% owned by Security Services, part of the Securicor Group Plc, the balance is held by British Telecom. Securicor, which reported overall pre-tax profits down 56% to UKP13.5m, blamed the poor results on the recession, which chairman Peter Smith described as the worst in recent years. Securicor’s communications division, which includes the retailing arm of Cellnet, continued to make a loss, up from UKP3m last time to UKP4.5m. Securicor company accountant Alan Chapman said the Cellnet losses could be attributed to four main factors – a reduction in phone usage, exceptional bad debts from service providers, the recessionary effect on network connections and high interest rates. Chapman said that for the year to December 1990, the average Cellnet subscriber used the phone for 120 minutes, compared to 160 minutes in the previous year. Comparing the results to Racal Telecom’s Vodaphone, Chapman said the different ways in which the two networks are financed affects comparisons. Cellnet uses financial leases, interest on which has gone up, to increase network capacity, compared to Vodaphone which has no external debt. Securicor expects an improvement in the second half.
