Cambridge Electronic Industries Plc has had enough of the difficult trading conditions in the electronic components sector and is to sell off up to five operations in that area. Over the year to December 31 Cambridge saw pre-tax profits fall 26% to just over UKP11m on turnover standing still at UKP175m. The components division was not solely to blame, however, as the deferral of defence contracts at Newmarket Microsystems also took their toll. Nevertheless Cambridge relies on two main types of business for its revenue: electronic components and high technology electronics. It has decided that profit margins are being adversely effected by trying to ride two horses at the same time and so is to put the Electronic Components Division up for sale. This means that PED Newmarket, the Enfield-based connectors business Belling Lee and the US switch manufacturer CRL are all up for sale individually. However, should there be a buyer for all three companies and for the US company Dialight and Cambridge Capacitors of Hampshire then Cambridge will sell all five companies to that one buyer. And indeed, Cambridge’s chief executive Paul Lester says that there is a UK group interested in buying all five businesses, but several more companies are considering taking one of the three businesses which are up for sale individually. If these should prove successful in buying, then Dialight and Cambridge Capacitors will be held by Cambridge Electronic until next year as they have strong earnings potential. Once it has divested the Electronics Components Division, Cambridge will be about a third smaller than at present, but Lester says that money from the sale of components companies will be used to acquire high margin businesses to add to the Group’s High Technology core.
