For the second year running, a substantially improved contribution from its technology division has enabled Thorn EMI Plc to report record pre-tax profits of UKP225.3m for the year ending March 31. The division produced profits of UKP39.4m, up from UKP29.4m last time, on a turnover of UKP755.2m. There was good news also from Computer Software, the off-the-shelf financial software house, which enjoyed its best year’s profit following an unspecified loss last year. With 27% of its business overseas, chief executive Colin Southgate claimed, the software operation is now truly global. It now has production facilities in the UK, the Netherlands and Australia and offices stretching from Japan to New York. Southgate emphasised that it will continue to sell systems only in areas in which it is expert, such as defence, finance, retail, civil aviation, space and many areas in the public sector. Thorn EMI Electronics is the largest single company withyin the Technology group, accounting for about 40% of the group’s turnover. The company specialises in defence and enjoyed a number of major sales in the US during the year. Even the note from Inmos International is less sour this time than heretofore, even though the company repeated its UKP10m loss of last year on a turnover of UKP50m. Thorn has invested UKP250m in Inmos, which designs and manufactures the Transputer advanced communicating and parallel microprocessor, as well as graphic and signal processing chips derived from it, and high speed static RAMs, chunks of which are also incorporated on board the Transputer. Last year Thorn appointed Wall Street investment bank Goldman Sachs to find one or more partners for the chip making subsidiary. According to Colin Southgate the bank has found plenty of partners for Inmos but we haven’t married any. Thorn is anxious to reduce its stake in the subsidiary to 25% or 30% as it does not feel it has the pull-through for that type of business, 80% of its business being in the leisure industry. However Thorn was able to report that the loss making subsidiary showed a profit of UKP1.5m for the first quarter of calendar 1988, and is currently enjoying a monthly turnover of UKP5.5m. With orders for the Transputer standing at $40m for 1988/89, $10m of them coming from Japan, Colin Southgate boldly predicted that the chronic loss-maker will actually make a profit this year. Asked as to why Thorn remained so anxious to find a partner if Inmos was beginning to turn around, Southgate was succinct: Name a semiconductor business that ever paid a dividend.
