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DIVERSIFICATIONS, JOINT VENTURES HELP GEC RIDE THE RECESSION, UP 1.3% FOR YEAR

GEC Plc returned another steady set of figures for the full year to March 31, reporting pre-tax profits down 1.3% at UKP829m on revenues that slipped by 0.5% to UKP9,435m. Cash balances were up by nearly UKP350m, partly due to business disposals, and a high level of orders was maintained. Research and development expenditure remained flat at UKP1,040m. The UK accounted for UKP3,478m of revenues, down from UKP3,722m, while the Americas slightly increased their contribution to UKP1,866m, and continental Europe to UKP2,614m. Electronic Systems, better known as GEC Marconi, saw profits slip slightly to UKP260m on turnover flat at UKP2,800m; Telecommunications reported profits up at UKP127m from UKP125m on sales down 10% at UKP1,125m. Defence remains the primary earner for GEC Marconi, though civil business is now taking a 26% chunk of sales. Though the division reported a drop in sales, GEC reports that Telecommunications has undergone rationalisation resulting in improved efficiency. The increase in profits, however, was descibed as unsatisfactory and the order book was weaker, particularly for System X switching equipment. The Payphones business, meanwhile, continued to grow with much of its output exported. Mobile Communications Equipment brought important orders in the UK and from Hong Kong and good progress was made in Voice Processing Systems, Computer Assisted Telephony, Videotelephony and Videoconferencing. Lord Prior, GEC chairman, concludes by saying we cannot yet say with assurance that there are no pitfalls ahead – in the light of the relatively stable results, however, the group is recommending an increase of 5% rise in the final dividend to 5.2p.

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CBR Staff Writer

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