Thorn EMI Plc, having failed to sell its once-core lighting business to GTE Corp – GTE pulled out of negotiations in September (CI No 1,503) – has found another partner in the shape of General Electric Co. GE will hold 51% of a new GE-Thorn Lamps Ltd, rising to 100% after three years in a deal worth UKP69m. Thorn EMI reported pre-tax profits for the six months to September 30 down 11% at UKP96m on turnover that was up 8% at UKP1,836m. The group is continuing in its attempts to narrow its activities into only those businesses which offer competitive strength. The assets of Thorn’s consumer finance houses have been disposed of, as have those of four of the six Systron Donner electronics divisions in California, and of Holophane Lighting’s pressed-glass operation in France. Apart from the cost of restructuring Lighting’s lamp business, the group has spent UKP13.5m on rationalisation this half, up 8.5% over the same period last year. Colin Woodley of Thorn EMI reports that in addition to the disposal of the four Systron Donner divisions, rationalisations in the electronics sector have included the closure of Woking site at a cost of UKP2.6m, the acquisition of MEL, the UK military electronics company, (CI No 1,517) which is being merged into the Electronics business, and the transfer of the Safety Systems division, one of the two remaining Systron Donner businesses, to Thorn’s Security sector – all in all, there have been 1,000 redundancies in the electronics sector; and the Rentals sector is being continually rationalised. Rent-A-Center has increased its profits, despite soft consumer demand in the US, and International Rentals achieved unit growth ahead of last year. Year-end results are not likely to match last year’s: the strength of the sterling depresses the reported contribution of Thorn’s international operations – which last year represented 60% of total trading profits. Nevertheless, Southgate is confident that the group’s long-term prospects are healthy.
