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November 23, 1995

WITH BID, GRANADA IMPLIES COMPUTER SERVICES MAY NOT NOW BE ITS FORTE

By CBR Staff Writer

With yesterday’s offer for the hotel and catering group Forte Plc, Granada Group Plc appears to believe that it has a big future in the television and leisure business, and it seems to have cast a giant shadow over the rental and computer services corner of the house, which is becoming a smaller and smaller proportion of the whole, despite the computer maintenance side being one of the biggest in Europe. The overshadowing is perhaps just as well, given the latter’s performance in the group over the past year. While television and leisure and services turned in substantial profit improvements, rental and computer services managed just a 3% rise in operating profits to ú122.9m from turnover up 4% to ú702.9m. A year ago, rental and computer services was the largest division of the three. It is now the smallest. Overall, the group’s reported pre-tax profits rose 32% to ú351.3m, and turnover was 14% ahead at ú2,381.2m. The company had very little to say about its Computer Services business, other than that it was maintaining progress in the UK, as was the Computer Disaster Recovery arm. Perhaps this reticence was a signal of future intentions. Revenues in the rest of Europe are said to be growing, although it is still patchy in some areas, according to the company, sounding bored. The rental business continued to generate plenty of cash for the group. The commercial division continued to win contracts installation of two-way VSAT and business television communication systems. The bid values Forte at ú3,400m: its shares at 338.6 pence. Forte shares rose 72 pence to 347 pence, Granada were off 48 pence at 649 pence. The final dividend of 7.9 pence makes a total up 17.5% at 11.75 pence.

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