Thorn EMI Plc has seen a rise in interim profitability due to its strategy of reducing overheads introduced two years ago. Pre-tax profits rose 11% to ?105m, while turnover grew 10% to ?1,945m. Net profits were down 37% to ?63.3m, however, because of ?14.8m gains last time from the sale of part of a surplus property in Edmonton as well as ?42m gains from the sale of 80% of Thorn EMI Software in July 1991. Thorn EMI has retained a 20% stake in the software business to support the company, now called Data Sciences Ltd, after its management buy-out in July 1991 (CI No 1,724). There are no plans to sell this minority holding as it is still considered a worthwhile investment. The security and electronics businesses were adversely affected by restructuring costs. Sales are traditionally weighted towards the second half anyway, and the delay of several unspecified defence contracts meant that the division managed only to break even, with revenues down 5.9% to ?195m. The security and electronics businesses were united under one management team in September 1991 to try to counteract the effects of a depressed defence market. The idea was to ‘harmonise technologies’ and move into new areas. Although the division is still focussing on its core defence activities, it did win a ?46m contract a few weeks back to provide the Seoul, South Korea, public transport system with an access and revenue control system. Other contracts include building an infrared system for the European Fighter Aircraft. The order book is strong ‘in length and strength’, with work for the next two to four years, so the division is expected to return to profit by year-end.
