Granada Group Plc has reported pre-tax profits for the year to September 29 down 27% at UKP121m on turnover that fell 15% to UKP1,392m. Chairman Alex Bernstein is disappointed with the group’s profits, which he attributes to the current economic climate as well as market problems in Overseas Rental and the internal operating problems of the Computer Services division. In the Business Services sector – which contributed sales of UKP207m for the year, up 3% on 1989 – efforts have been devoted to improving the performance of Computer Services following the integration of constituent businesses, involving management changes and staff reductions. Computer Services has been divided into two divisions – one representing Europe and one representing North America, as the two markets were felt to be sufficiently different. Peter Edwards, newly appointed to the European division and effectively replacing Connor Kehoe who left four weeks ago, reckons Computer Services is making a turn-around and should be back on its feet within 18 months. New contracts that have been won include a three year contract valued at over UKP500,000 per year – to maintain IBM and plug-compatible equipment at Galileo’s airline reservation data centre – formerly IBM territory, a contract of similar worth for Royal Army Paycall, as well as Unix contracts with Sequent Computer Systems and MIPS Computer Systems. The Meridian lawsuit – Meridian withdrew from a joint sales pact with Granada last year – has received its first court hearing and gone to arbitration – Peter Edwards commented that the issue should be resolved in the near future, although he was not in a position to comment on its likely outcome. Group borrowings increased by UKP110m over the year but capital expenditure was relatively flat at UKP291m – and is expected to be lower for the current year. Bernstein fears performance for the current fiscal year will reflect continued economic difficulties.
