The ever-shrinking Ferranti International Plc still has some way to go before it achieves a turnaround to profitability. At the company’s interim results meeting in London yesterday, chairman Eugene Anderson boldly stated that within the next 12 months, we’ll get to a position where we’ll have an operating profit. The key to achieving this, he said, is continued cost-cutting, which will primarily involve selling off 15 UK manufacturing facilities and shedding 2,000 more employees. Says Anderson, the future of those businesses which continue to incur losses and consume cash are under close review, implying that more disposals may be in the pipeline. Pressed further on that point, and asked whether Ferranti might shut up shop in the US for example, Anderson noted that The Marquardt Company, which is gradually being sold off, had been Ferranti’s main involvement across the Atlantic, and although emphasising that Ferranti doesn’t have a stated strategy of withdrawing from the US, he added that he wouldn’t be surprised if some of (the company’s) US businesses will be sold. The remaining US activities are a welding systems operation, a power supplies business and Ferranti Technologies Inc. Ferranti International Controls Corp, FICC, the US subsidiary which makes Ranger electrical power management systems, entered Chapter 11 proceedings in August. For the last two year ends, Ferranti has made identical provisions of UKP27m for FICC. Anderson noted that much of the company’s US business is conducted from the UK. Ferranti hopes to have completed its cost-cutting programme by next September: I think we’re getting close, he said. Ferranti turned in UKP29m pre-tax losses for the first six months to September 30, up from UKP20m losses last time, on revenues down 15% at UKP212m. Outstanding orders at the year end totalled UKP434m. Excluding orders relating to disposed businesses, including the missiles business that went as a peace offering to GEC Plc, the order book is UKP10m up from the prior six months; and Ferranti claims to be in receipt of new business, booking UKP148m of new contracts in the first six months.

Brazilian Navy

Trading losses of UKP22m include UKP11.3m exceptional charges which are mainly comprised of redundancy costs. During the period, headcount was reduced by a further 1,650 – 18% – to 7,410. The painful burden of net borrowings in the last six months have crept up to UKP98m from UKP95m. The Marquardt Company had proved difficult to sell as a whole entity, so Ferranti has broken it down into chunks, successfully managing to sell off the ordnance business in August, while negotiations for the Marquardt propulsion business and land continue. And the business and assets of Cardion Electronics Inc were sold to Siemens Corp in the US in September. Ferranti is more of a systems integrator than anything else now, and readily admits that it is happy to sell other vendors’ hardware. It focuses on naval and military contracts, where it specialises in customised solutions. Slowly liberalising Brazil is still an important market for Ferranti; the Brazilian Navy uses Ferranti command and control systems, and continues to put new business Ferranti’s way. Ferranti still retains an interest in the Brazilian company, Cobra, which just signed a $20m deal to sell Sun Microsystems Inc machines.