Intensifying the perception of GEC Plc as a bank with a few industrial interests tacked on, the company’s interim figures, out yesterday, show that despite the intense acquisition and merger activity during the half year, as at September 30, the legendary cash mountain stood at UKP1,266m – actually a little up on the UKP1,237m as at September 1988. There will be something of a dent, at least temporarily, in the current period, because the figures do not include the acquisition of Plessey Co Plc by affiliated company GEC Siemens Plc: that is being treated as having been completed on October 1. The cash mountain should anyway not attract the controversy it does – Siemens AG has vastly greater cash reserves as GEC and reckons it could not run its business prudently without them. The two big deals that are reflected in the figures are the 50% stake in GEC Alsthom NV, the power generation joint venture, and the 50% stake in GEC’s consumer goods businesses sold to the company’s Stamford, Connecticut namesake General Electric Co Inc. Most divisions of the company performed well, consumer goods being the main exception, and the company is in the happy position of being able to declare a pension holiday at least until the next actuarial valuation in 1991 – meantime benefits to pensioners have been increased and employee contributions reduced. Sector by sector, telecommunications was flat at UKP20m pre-tax on turnover up 14% at UKP278m – that is GEC’s 50% of GEC Plessey Teelcommunications. Electronic systems were 5% ahead at UKP80m on sales almost flat at UKP896m; office equipment and printing was up 20% at UKP20m on sales up 27% at UKP197m; medical equipment, where a partner is still needed, was very dull – at UKP11m, profits were off a little and sales were scarcely moved at UKP208m. Electronic components were also dull, 20% off at UKP8m on sales up marginally at UKP135m, and electronic metrology saw a 35% jump in sales to UKP241m, but profits off4% at UKP23m. The other areas of activity are outside the scope of Computergram. Research and development expenditure was UKP337m, UKP154m funded by the group, and private venture were up UKP17m. Total research and development, at 9.2%, was about on target with GEC’s competitors, but the company is clearly adroit at getting others – led by the UK government – to pay for much of its research: internally, funds going into the future products and services represent only 4.2% of sales. Orders in hand at the end of the first half stood at UKP8,000m, the company says. And shareholders have an 18.6% increase in the interim dividend to celebrate – GEC is proposing to pay out of 2.55 pence a share.
