Telemetrix Plc saw pre-tax profits tumble 35% to ?5.2m as its 58%-owned US subsidiary GTI Corp faced price erosions, in particular at its networking components subsidiary Valor, offsetting Valor’s 20% increase in unit sales. GTI Corp net profit fell 57% to $1.5m on turnover up 3% to $34.5m and was also affected by start up costs of the new Phillipines plant. Chief executive Tim Curtis said that the firm is in a capacity constrained situation, which may mean that it is short of manufacturing space. A fourth plant was opened in China in June which will meet continuing growth in unit demand and will increase capacity from about 6,000 to 11,000 units by the end of the fourth quarter. Total Telemetrix turnover for the six months to June 30 was up 6% to ?65.4m. The firm is looking to shift its product mix to those with a higher margin now that the telecommunications market is maturing and Telemetrix margins are falling. It is currently considering a technology acquisition from a company it has targeted in Germany and anticipates some form of licensing of the technology and ongoing joint development. It expects to make an announcement in the next six months. The firm’s cash position remains strong and stood at ?11.4m at the six months and it plans to maintain this level so it is ready to take advantage of any acquisition opportunities as they arise. The two wholly-owned UK subsidiaries both fared better than GTI and exceeded the firm’s expectations. The semiconductor manufacturer Zetex saw operating profit up 12% to ?1.4m brought about by additional capacity being added in the second half of the previous fiscal year and the introduction of new products. The telecommunications test equipment manufacturer Trend grew operating profits 43% to ?1m. It’s new Primary Rate ISDN Tester boosted sales particulary in Germany. Telemetrix maintains a continuous programme of new product development in the UK and plans to build up a stronger position in the digital telecommunications and networking market. The firm also aims to even out the spread of its US and UK turnover and due to the fall in GTI’s profits, the two UK businesses contributed 56% of the earning per share compared to 21% last time. Earnings per share stood at 3.1 pence this time down from 3.8 pence last time. Telemetrix does not have a policy of paying an interim dividend.
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