Telemetrix Plc is back into profit again this year, but the headline earnings figures masks the Jekyll and Hyde nature of a group deeply troubled by its transatlantic investment. While the successful UK semiconductor and test equipment subsidiaries stride purposefully ahead, Mr Hyde, aka GTI Corp (the groupÆs Nasdaq quoted and 57% owned networking equipment subsidiary in San Diego) lurks forever in the background, threatening to ruin everybodyÆs day. Results for the year to December 31 saw consolidated pre-tax earnings rise to 4.9m pounds against losses last year of 6.9m pounds, while revenue fell 10% to 117m pounds following the disposal of a loss making division last year. But the only way to make any sense of the true picture is to split the group into its constituent parts. Zetex, the groupÆs specialist semiconductor manufacturer, continues to perform, despite the cyclical downturn in semiconductor prices. The company isnÆt glamorous, making low profile products like power switching transistors, but Zetex fights its corner well and continues to generate cash. Tim Curtis, group chief executive, has been following with interest the recent troubles at Intel Corp and Motorola Inc. Over capacity at the giants of the industry creates opportunities for the smaller players to snap up bargain second hand fabrication equipment. While Motorola is ploughing millions into developing twelve inch wafers, Zetex is only just moving from four to five inches. Trend, the groupÆs ISDN test equipment maker, has made good money again this year. Sales of its robust, handheld testers for field engineers continue to grow in tandem with the worldÆs appetite for ISDN. And together, Zetex and Trend have built revenue and profits steadily for the past six years. Which brings us to the problems at 57% owned GTI Corp. After a false dawn in the first half of 1997, it was back to falling revenues and inevitable losses for the US network-access products company. In a rapidly consolidating networking market, GTI looks increasingly lonely, and its shares continue to bump along near the bottom. In February, it finally appointed investment bankers Cowen & Co to help find it a potential buyer, and the Telemetrix board, who for historical reasons exert little or no control (despite their majority holding) will be praying for rapid deliverance. In the first two months of this year, Zetex and Trend are ahead of budget, while the outlook at GTI remains bleak.
