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February 12, 1989


By CBR Staff Writer

IBM United Kingdom Holdings Ltd has announced its end of year results saying that pre-tax profits rose 11% to UKP512m on turnover that was also up 11% at UKP3,874m. However, although the company proudly states that exports were up 17% to UKP2,144m it neglects to give its import figures, and since IBM tries to keep its imports and exports net neutral in each country in which it operates this leads to one of only two conclusions. Either imports were as high as exports, which seems unlikely given that total business within the UK was only UKP1,739m, or IBM UK is overstepping the corporate rules governing the import-export balance. If the latter is the case, IBM may well have to shift manufacture of some of the successor products to the ones it makes in the UK onto the continent to get back into balance. and away from Britain. During the year, it added seven new machines to its Personal System/2 family, and claims that European demand for the PS/2 (which is manufactured in Greenock) contributed to the rise in exports for the company in the last year. Another highly profitable product for IBM UK last year, according to its chief executive Tony Cleaver, was the IBM 9335 disk drive, which is manufactured at the Havant, Hampshire plant and is used in the Italian-built AS/400. The 9335 drive was developed at IBM UK’s Hursley Laboratory winning it a Queen’s Award for Technological Achievement. The Laboratory, which celebrated its 30th anniversary last year, also wins Brownie points for shipping Presentation Manager, part of IBM’s OS/2. Finally, during 1988 IBM UK increased its workforce by 660 people, raising its current number of employees to 18,686. All these achievements added up to a 5% increase in net profit which rose to UKP327m, and Cleaver says the company looks forward to an encouraging year ahead, secure in the knowledge that it has a strong order backlog under its belt. On the other hand, IBM’s home revenue in the UK only rose by 6% in 1988, which is significantly lower than the 15.5% by which IBM’s non-US business rose in general over the last year (CI No 1,097), suggesting that within its home market, the UK unit underperformed many of its European siblings.

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