A very mixed bag of results are in from four of IBM Corp’s key country operations – the UK, France, Canada and Spain. In the UK, the pain has been going on longer and has cut deeper, with the result that the company returned to the black for the first time since 1990, and made pre-tax profits of ú96m – $153m – in 1994, compared with a loss in 1993 of ú174m. The figures reflect disposal of the Havant manufacturing to a management-led buyout. IBM UK group turnover rose 8.5% at ú4,400m – $7,000m, with exports up 8.6% to ú2,530m – $4,020m, still outweighing business done in the UK thanks to the big personal computer plant in Glenrothes. Exports must have substantially exceeded imports because domestic business rose 8.3% but is still only ú1,870m, and sale of Havant will tend to reduce total turnover and cut into exports – although almost ú2,000m of the exports are understood to be generated by Greenock. Restructuring charges amounted to ú80m, reflecting the reduction of the workforce by more than 2,000 to 9,183 during the year, although 700 of the jobs that went were sold on with the Havant factory. Job reductions are thought to be largely complete in the UK, but across the Channel, provisions to cover the cost of redundancies planned for this year left IBM France SA with a net loss equivalent to $286m, down from a $411m loss last time; it was in profit at the operating level, turning in $450m, about flat with the 1993 figure. Turnover grew 3.6% to $6,000m. In Spain, IBM Espana SA was back in the black with net profit of $137,000 and operating profit of $114m. Turnover was down 3.7% at $1,642m. While IBM in the US is still largely characteristic of the old smokestack IBM whose business is doomed to fade away, IBM Canada Ltd was one of the earliest subsidiaries to put in place a structure that reflected the kind of company IBM now wants to be rather than the kind of company it used to be, and the fact is reflected in the figures. The subsidiary, with little manufacturing, but bristling with services, reported a net profit for 1994 equivalent to $109m – against a loss last time of $92m – on turnover that jumped 26% at $5,945m. All of which explains why its just-relieved chairman John Thompson is a rising star at corporate headquarters and in the most recent reshuffle inherited Ellen Hancock’s portfolio, with the added responsibility of turning IBM’s stodgy, unproductive – and widely derided – software business into a competitor the rest of the industry respects and fears. At IBM Canada, domestic sales rose 14.8% to $2,190m, and exports soared 34% to $3,755m. Almost as big as IBM France last year, IBM Canada should surpass the Gallic subsidiary this year with its acquisition of the shares in ISM Information Systems Management Corp it did not already own, though since it already had 52% we can assume that it already consolidated the figures.
