Memory & Electronic Components Plc, or Memec, has recommended to its shareholders a UKP74m bid from an undisclosed European company. Finance director Colin Stevens says the buyer is making the bid only as an investment, and will not be interfering with the operation of the company. Memec has denied rumours that the buyer might be French companies Metrologie International SA or Schneider SA. The electronical components distributor has turned in pre-tax profits up 27% at UKP8.5m on sales up 14% at UKP111m. The company’s success, according to chairman Mr Skipworth, lies in its diversity of products, and expansive geographical coverage. Memec has been optimising on the weak market conditions offering its services to manufacturers that can no longer cope with the high costs incurred in addressing markets directly. During the year, the company introduced new systems and software products in the UK and new programmable logic devices in the US. A new systems sales office has been established in the former East Germany and a new division of the US operation has been opened in San Jose, California. In the UK, orders were flat in the second half of the year, but this was compensated for by a record sales backlog at the year end. Germany did not improve its results as quickly as anticipated – in local currency, sales grew by 5% and profits fell slightly. Substantial investments were made in developing new products within Metronik Systeme and expanding component lines. Better results are expected for the current year, and Memec is optimistic for the future in Germany and in Jugoslavia, where the company recently set up. In France, Newtek made a significant contribution to the group result, although the market has been flat and the military element in decline. Semiconductor prices and gross margins have been under pressure, but Newtek countered these effects by increasing sales volumes and adding new high technology lines. The US operation, Insight, turned in a small loss for the year – attributed to the costs incurred in the establishment of the San Jose sales division – on sales up 21% to $29m and the planned gross margin was improved to meet target. Insight traded profitably during the last quarter of 1990 and Memec is optimistic for its performance this year. The South East Asia operation benefitted from the company’s links with US manufacturers and Memec is continuing to invest to keep up with market growth.
