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February 9, 1989

HEWLETT PACKARD UK SEES 27% FALL IN 1988 PROFIT AS IT INVESTS UKP43m HERE

By CBR Staff Writer

Hewlett-Packard Ltd has seen a fall of 27% in UK pre-tax profits, which were just over UKP23m at the end of its financial year as a result of increased overheads, higher interest charges, and lower gross margins; sales rose 14% to UKP490.2m. During this time it increased capital investment by 75% and employed 5,000 more people in the UK. A large part of the UKP43m capital investment was spent on 30 acres of dev-elopment land in Bracknell, which will eventually house the company’s UK headquarters, as well as on the completion of its South Queensferry site in Scotland. Hewlett-Packard Ltd’s management strategy over the past year has been to concentrate on joint ventures and business alliances. For example, the company’s telecommunications division, based in Scotland, liaised with a subsidiary of the Italian STET group, Network Control Systems SpA, to research, develop and market measurement systems and instruments for telecommunications network services. Meanwhile its Berkshire-based office productivity division, concerned with office software, undertook a marketing agreement with Octel Communications Corp to sell its voice processing products throughout Europe. And, finally, the company’s computer peripherals division, based in Bristol, is continuing its joint venture into computer storage applications for digital audio tape technology with the Japanese firm Sony Corp. All in all, Hewlett-Packard Ltd sees 1988 as a year of consolidated growth which it believes will continue in 1989 (the year of Hewlett-Packard’s 50th anni-versary) largely due to demand for its Unix workstations, as well as to interest in its Precision Architecture family of minicomputers.

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