Marconi Plc, an organization described by its boss as EuropeÆs brightest technology company comes into existence today, beginning life by absorbing its latest acquisition. After masterminding a series of major take-overs, Marconi chief executive George Simpson gave his company the brightest label and said its global communications platform had been established and communications growth is accelerating.
Simpson certainly got the backing of analysts and the sight of what was regarded as a dour and conservative company transforming itself into a telecoms equipment manufacturer was enough to see the shares gain 24% last week, to end at 969 pence.
Marconi, formerly known as General Electric Co Plc, celebrated its new status by buying Bosch Public Networks from Bosch Telecom GmbH for 95m pounds ($152.9m) to strengthen its position in the German and central European markets.
Backnang-based Bosch Public Networks had revenue of 383m pounds ($616m) in its last full year and, though its customers include Deutsche Telekom and Mannesmann AG, it managed to make losses supplying the worldÆs third largest telecoms markets. Marconi has vowed to return it to profit within 12 months, both by using it as a pipeline to sell MarconiÆs product range into the German market, and by selling BoschÆs broadband point-to-multipoint radio access technology through its international channels.
Simpson delighted the stock market by bringing in mid-term profits last week right at the top end of analystsÆ expectations, with a 299m pound ($481.3m) operating profit, 51% up on last yearÆs level in the six months to September 30. Net profit, dented by 181m pounds ($291.4m) of goodwill amortization on acquisitions, was 47m pounds ($75.6m), down on the 1bn pound ($1.6bn) recorded last year when the figure was inflated by a 965m pound ($1.5bn) gain on the sale of a subsidiary. Excluding the defense group, which is being demerged from Marconi, turnover rose 40% to 2.5bn pounds ($4bn).
So far this year, Marconi has bought communications equipment supplier Reltec Corp, broadband switching company Fore Systems and the Israeli-based RDC, which offers wireless IP local loop systems. These have been integrated with Marconi communications to offer a broad range of communications and data networking systems.
After its 4bn pound ($64bn) spending spree, Marconi now insists that it is positioned to participate in the rapid growth of its markets. The strength of its balance sheet and accelerating value of its paper should ensure that Marconi will not be inhibited in making further acquisitions.
