Cubic Corp, the San Diego, California-based ticketing and defense organization, is blaming the poor performance of its UK-based Thorn Transit Systems International subsidiary on its disappointing second quarter results. The San Diego company that bought Thorn Transit last year, saw second quarter net losses of $5.7m on revenue that fell 7.2% to $98.1m, while losses for the six months to March 31 were $3.0m on revenue up slightly at 0.5% to $184.1m. Cubic expects Thorn to generate losses from se veral Asian contracts it has been carrying out, but is confident it will be back on track soon. The shaky economic situation in Asia at the moment has turned a lot of potentially profitable contracts in to losses, and to cover those losses Cubic is setting aside $9.5m of pre-tax reserves. Chairman and chief executive Walter Zable described the losses as a temporary hiccup and went on to say he expects the company to turn in a profit for the year. One of the main reasons for this confidence is the contract London Underground is expected to award Transys, a consortium in which Cubic and Electronic Data Systems Corp are the major partners (CI No 3,217). The Consortium is to install a smart card-based ticketing system, named Prestige, for London’s transport network. Cubic’s part of the agreement is expected to generate $700m in revenues over the next 12 years, with a five year option. But in the mean time, Cubic has decided to restructure the management within Thorn Transit, as well as making operational changes throughout its UK businesses, in an attempt to recover some of its losses. Cubic’s director of corporate communications, Abe Wischnia told Computergram that the company is not yet willing to discuss the intricacies of the restructuring because it will affect individuals. He said he did not know whether there would be any job losses.
