The pathfinder prospectus from telecommunications electronics specialist Telspec Plc sees the company looking to expand its manufacturing base. Chairman, founder and sole owner Frank Hackett-Jones will sell between 35% and 40% of his holding, and pocket around UKP20m. The Rochester, Kent-based company, which specialises in building line equipment for telecommunications operators is hoping to raise an extra UKP5m for itself in the placing. This will be used to boost capital spending in its UK and Australia operations and in particular, expand and automate its manufacturing. In addition the company intends to open service and support operations in Germany and Turkey. Telspec boasts a wide portfolio of telecommunications equipment, from message announcement systems to line amplifiers. However, around 60% of revenue comes from pair-gain equipment – boxes that enable telecommunications operators to supply more than one logical telephone line over a single physical connection. Telspec’s pre-tax profits for the calender year 1992, came to UKP3.36m on turnover of UKP18.2m. This year’s six months results to June show pre-tax profits of UKP1.94m on turnover of UKP8.53m. Its single biggest customer is British Telecommunications Plc, which accounted for 64% of the half-year turnover, other customers include Telecom Australia and Deutsche Bundespost Telekom. The company has yet to fix the number of shares to be issued, but they will be placed with the institutional clients of Credit Lyonnais Laing. Telspec employees will also get a chance to buy in and 5% of the issue will be offered to the main market makers, as UK regulations demand. The decision to open a Turkish operation is partly due to what Telspec chief executive Garth Riley describes as: a very close relationship with the Turkish PTT. In addition Turkey will act as base for Telspec to sell to the neighbouring Muslim and former Soviet states. The placing price and final prospectus will be issued on the December 2, with dealing due to start a week later.the second year year, another 33% in the third. The rest of the placed Lynx equity will raise UKP820,000 cash as working capital. The share placing, made at 36p per share, is subject to clawback by qualifying shareholders who can buy 16 offer shares for every 25 existing Lynx shares held. Lynx’s new charges seem to be in good health: last year, Chess Valley made UKP302,000 profit on a UKP1.8m turnover, while Financial Systems made UKP588,000 on UKP1.5m. Chess Valley will help the group explore the mortgage and secure lending markets while Financial Systems will open the door to banking, trust adminstration and fund management clients. The group will continue on the acquisition trail to expand its services offerings. Lynx also contains Hull-based APD Mertech Ltd, a radio communications software company, and Town Art Group, which is a somewhat doubtful fit as it makes bouncy castles.
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