One month after announcing a planned UKP5.1m rights issue and the intention to merge its loss-making US subsidiary with another company (CI No 1,445), Electron House Plc has reported net profits of UKP1m, compared to UKP2.7m last year. Pre-tax profit also fell to UKP4m from UKP4.8m, but turnover rose to UKP130m from UKP92m. The company attributes lower profits to high interest rates and problems with Electron House Inc which recently defaulted on repayments for bank borrowings of $5.5m. The US company discontinued operations on April 30, and Electron House has made provision against remaining investment and inter-company debt as an extraordinary item of UKP1.3m. With the exception of components, the rest of the company reported increases on revenue and profitability. Bytech Peripherals Ltd in the UK and Eire saw turnover jump to UKP62.6m from UKP32.2m, and profits increased to UKP4.1m from UKP1.9m. Bytech Systems and CEM Computers Ltd, the computer systems division, also saw turnover rise to UKP22.8m from UKP12.7m, and profits reached UKP1.6m, an increase of UKP744,000. The company says that the past year has been a difficult one for the electronic components market, and memory components have experienced reductions on prices and margins. Turnover in the UK rose slightly to UKP30.7m but profits fell by UKP600,000 to UKP2.2m. Operations in Australia and New Zealand achieved turnover of UKP10m and UKP3m respectively, but Australian profits fell by UKP741,000 to UKP859,000, and New Zealand was also slightly down at UKP299,000. The US made a loss of UKP63,000 on turnover of UKP3.7m. Electron House says that the Antipodean marketplace was generally poor, although the order books are now stronger than they have been for some time. The company believes that computer systems will continue to grow in the coming year, albeit at a slower rate, and it forecasts an improvement in the the demand for memory components. While it expects to be affected by a slowdown in the UK economy, Electron House Plc anticipates that the forthcoming rights issue and exclusion of Electron House Inc will lead to an improvement in the current year.
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