London-based Granada Group Plc has begun to see the benefits of restructuring its loss making Computer Services division this year, reporting operating profits up UKP8.7m for the business against a loss of UKP11.8m in 1991 (CI No 1,708). Granada, which spent UKP200m acquiring computer support companies for its Computer Services division in the mid-1980s, gave the company instant market leadership in Europe. The division, however, quickly became a disaster when it failed to integrate the new companies – incurring UKP11.8m losses in 1991. Granada’s problems were compounded by the recession and an overall debt burden of UKP494m in 1991. The turnaround, the company says, came about with the appointment of troubleshooter John Curran now the chief executive officer of the division a year ago. After immediate surgery cutting divisional overheads, he put the operation back on track reporting pre-tax profits for the division of UKP4.3m, on turnover of UKP77.2m at the six month stage. The Computer Services division now claims a UKP20.5m turnaround in revenues for this year end. Morale was further boosted earlier this year when the Computer Services division won a UKP12m contract from British Aerospace Plc (CI No 1,909). Granada as a whole reported net profits of UKP78.8m, against losses of UKP8.7m last year, after UKP13.1m charges provision against its investment with building contractor John Lang Plc for the Lakewoods leisure development and goodwill payments of UKP15.8m. As well as gaining UKP1m in credit from a employee benefit scheme. Affecting net profits, Granada incurred extraordinary item charges of UKP47.8m for the disposal of its Canadian rental business, leisure property writedowns, disposal of overseas computer operations in France and Germany and withdrawal from specialist retail and electronic activities, on turnover that dropped 1.76% to UKP1.3bn, on UKP1.4bn last year. Performance in all Granada’s four businesses has improved: rental division reports an increase in operating profit of 9.4% to UKP97.8m, on UKP89.5m last time; in the TV sector profits were up 49.8% to UKP32.8m, on UKP21.9m in 1991; lesiure business now split into two internal divisions, Granada Hospitality and Granada Leisure Development, turned in profits up 16.1% at UKP26.7m, on UKP23m last time; the Computer Services division profits rose to UKP8.7m, against losses of UKP11.8m. Granada chief executive Gerry Robinson said that the company’s main objective for the current year is to continue to cut operating costs of its subsidiaries. However, Robinson added that the interim objective to stabilise its four businesses has now been achieved.
