Shares in former UK- but now Hong Kong-based power conversion and electronics components manufacturer Astec (BSR) Plc fell yesterday, despite it reporting a healthy rise in interim profits. Pre-tax profits for the six months rose 32% at 13.1m British pounds on revenue that rose 14% to 199m pounds, but the market responded with a 2.5 pence drop to 140 pence per share by midday yesterday. Astec dissolved its cellular phone business in the early 1990s. It now comprises two divisions, both of which continued to grow but at a slower rate. In response, Astec continued restructuring efforts to improve underlying profitability. The Power Conversion business reported operating profits up 37% on revenue rose 17% to 158.1m pounds. Astec said its continued market share gain in the sector had been driven by the introduction of new products and an expansion of the firm’s customer base. In the smaller Electronic Component division, which focuses on the supply of resistors, fixed films, magnetics and hybrid circuits to high-growth niche markets, operating profits rose by 15% to 2.7m pounds on revenue that edged up 5% to 41m pounds. In his statement, chief executive David Farr said the company had continued to focus its efforts on a general t ightening of the purse strings, particularly within the areas of stock and debtors. The Custom Power divisional headquarters relocated to the Philippines during the half. Remaining staff were moved into smaller leased premises, which enabled 1.6m pounds cash to be generated from the sale of surplus property in Hong Kong. Outlook for the second half remains optimistic and Farr said by keeping costs under tight control while investing in new product development, he expected financial performance to continue to improve throughout the fiscal. Interim dividend is 0.63 pence.
