In accordance with the warning given in May (CI No 1,671), Granada Group Plc’s Business Services division traded at a loss of UKP700,000 during the six months to April 13, against UKP4.8m profits last time, on turnover down 1% at UKP104.5m. Computer Services has been a continuing source of disappointment, though chairman Alex Bernstein reckons that the restructuring programme being implemented in this area will soon begin to yield positive financial results. Part of this divisional shake-up has involved 150 job losses since September, the closure of six properties and the shedding of peripheral businesses including Telefusion Communications Ltd, which was sold to Blick Plc in May (CI No 1,675). And some 30% of the smaller, uneconomic contracts have been eliminated. Granada intends to continue to invest selectively in the core activities of the business services sector and the larger contracts, so that the company might be in a position to benefit when the economy turns back around. Several new UK contracts have been signed – Chase Manhattan Bank, Bank of Ireland, Renault, British Aerospace Plc and London Electricity have all come on board. A significant number of contracts have been renewed during the period, building confidence that all is not lost on the services front. Derek Lewis, chief executive for computer services, and director Peter Davis resigned in May following disagreement over the rescue rights issue and over the re-financing of British Sky Broadcasting. The one-for-three rights issue, approved last month, raised UKP163m net of expenses – 120m new shares at 140 pence each. The cash raised has been put towards strengthening the group balance sheet.
