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September 19, 1995

SOLARTRON ACQUISITION DOES THE BUSINESS FOR ROXBORO

By CBR Staff Writer

Roxboro Group Plc’s acquisition of Solartron Ltd made a dramatic difference to its interim figures released yesterday. The Newmarket, Suffolk-based specialist components, instrumentation and sensor manufacturer paid the final tranche of ú10m to Solartron in July (CI No 2,703), made up of ú5.75 in cash, the rest in new shares. Roxboro has paid a total of ú65.5m for Solartron, which it acquired back in May 1994 (CI No 2,400). Pre-tax profits for the half-year to June 30 were up 82% to ú8.2m on turnover that soared 75% to ú45.8m. However most of those rises came from the Solartron businesses. In the core components division turnover was up just 4% at ú22.3m and operating profits up 3% at ú4.2m. Dialight accounted for the turnover growth, where a strong performance was slightly offset by costs from the addition of 40 staff in the half and seeking out new Light Emitting Diode suppliers. The suppliers have been indentified and the recruitment drive continues. Research and development costs have also increased at Dialight, mainly in the Transport Product Group, which will launch a range of products within nine months. Turnover at BLP, the other components business, was flat. This was due to lower than anticipated growth in filters and production difficulties, offsetting growth in electro-magnetic products, according to the company. The problems experienced at its Harlow site have led the company to consider further investment to expa nd the capacity. The two sensor companies, Weston Aerospace and Solartron Metrology saw operating profits double to ú3.0m and turnover increase 18% on a like-for-like basis to ú11.9m. The niche markets of the companies produced operating margins of 25% in the division, which are likely to fall as a slowdown in the US car industry takes effect, according to the company. Metrology should benefit from the trend towards farming out manufacturing, said the company. Weston Aerospace supplies thermocouples to aircraft engine manufacturers. Its after-sales spares business is growing well and it recently signed an agreement with a US distributor to boost this further. In the instrumentation division, Solartron Transducers and Solartron Instruments are currently in the process of being merged. Turnover at the division fell in the half, but the board hopes that by focussing on the areas of data acquisition, flow measurement and laboratory instruments, deep cuts in operating costs will be achieved and the margins increased. The merger will be completed by the year-end. The shares were up fivepence at a year high of 270 pence. Roxboro will pay an interim dividend up a third at tuppence a share. Pointing to its mix of cash-generative and long-term growth businesses, such as the instrumentations businesses, the company said it was confident for continued growth in the future.

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