The Thame, Oxfordshire-based electronic components and systems supplier, Memec Plc is asking its shareholders to fix their gaze on a future world of sales opportunity in the Single European Market and the Eastern Bloc. This is because, despite economic pressures, Memec is forging ahead with investment in new products and in penetrating new geographical markets. The damage this has wreaked in its annual results are therefore forgivable, if not exactly welcome. The group has produced pre-tax profit down 20% to just over UKP4m on turnover up 20% to top the UKP97m mark. Memec’s biggest market is the UK which produced around 60% of the group’s turnover and nearly all of its pre-tax profits. But, profits from the UK market declined by 13% over the year chiefly because of the slowdown in the UK component market and the decrease in the selling price of the MOS Memory product, but also because sales of Memec’s subsystems and peripherals were adversely affected by the slump in the personal computers market. In West Germany the group’s new component operation ASP has been very successful driving sales in local currency up by 11%. IST, the company that was troubling Memec at its interim stage continued the rest of the year at a loss, and has, consequently, been merged with the industrial controls systems division of Metronik to form a new company Metronik Systeme. All West German businesses are now operating profitably and, following the changes in Eastern Europe, Memec has already identified several potential business partners in East Germany and Yugoslavia. Memec also has business interests in France and South East Asia. The former through the acquisition of the company Newtek which, in revenue terms, has grown by 40% a year, while the latter has remained static throughout the year as a regional sales network is built up. Meanwhile Memec’s semiconductor memories business in the US was disappointing because of reduced margins and the cost of developing new sales offices. Overall, Memec says that it is looking for long term growth, which means that in the short term it is looking for patience from shareholders.
