Granada Group Plc hurried out its results yesterday to bolster its hostile bid for LWT Holdings Plc (see front page) and with operating profits from television up 30% to UKP43m, the attraction is easy to see. By comparison, Computer Services saw its profits grow by only 8% to UKP8.4m and its turnover actually dropped to UKP146m from UKP159.4 for the last year. A good part of this drop was a result of organisational reshuffling, said Computer Services chief executive John Curran. In particular MSD, which does personal computer warranty work, was moved across to the rental division. He acknowledges, too that last year was tough. A good proportion of the company’s contracts came up for renewal at the same time and consequently, some recurring income was lost. About 40% of these lost contracts were because of either bankruptcies or kit that was ripped out and not replaced. Most of the rest of the dip, he attributes to price degradation. New business has been good, he says. Overall, then the company says that it is satisfied with the steady progress that computer services is making. Curran expects firm growth next year. For the group as a whole, the jump in profit is somewhat overstated by the figures. A UKP13.1m write-off against investment was included in last year’s figures and this year’s acquisition of Sutcliffe Catering and Spring Grove added UKP259.6m to the group’s turnover. Gearing remains very high at 87% after the cash payments that Granada made for these, and the 17.5% stake in LWT, totalling UKP292m. However the company describes itself as highly cash generative, and says that it can drop the ratio when required. The board is recommending a final cash dividend of 5.725 pence, making a total for the year of 8.75 pence – a 14% increase.
