IBM UK was in the same boat as IBM France in 1990, turning in lacklustre figures against the trend of the group as a whole. Pre-tax profit fell 8.5% to UKP420m, and the profit margin fell to 10% from 11%; turnover was up 3% at UKP4,324m, but all growth was accounted for by sale of PS/2s and disk drives manufactured here to other IBM Europe companies. Exports of goods and services rose 13% to UKP2,384m to represent 55% of the total; sales within the UK fell by 6% to UKP1,976m, which implies that the UK company did less than pull its weight in buying from its siblings on the continent. After tax profits fell 17% to UKP266m and the tough environment was reflected in stringent employment policies – the company ended the year with 18,374 employees, 178 fewer than in 1989. The IBM Financial Services leasing subsidiary grew its portfolio by 14%. The company is not confident that the current year will be much better: chairman Tony Cleaver comments that 1991 will be a difficult year for the economy. We can anticipate intense competition in a marketplace which is unlikely to show significant growth. We have taken steps to compete more effectively in the short term and are accelerating our rate of change so that we will be better placed to meet the challenges of 1992 and beyond, the statement concludes.
