Racal Electronics Plc, long regarded as a corporate invalid, is showing signs of leaving the sickbed. Shares in the UK-based group rose by almost 10% to 322 pence when Racal revealed mid-term profits up from 8.9m pounds to 29m pounds on revenues that fell 8.2% to 548.4m pounds. The sinking revenue figures reflect the disposal of its disastrous data communications subsidiary to Platinum Equity Holdings in September. However, revenues from continuing operations were up only 2.4%, and total operating profits were down from 49.9m pounds to 46.9m pounds. Racal is still searching for a chief executive for its telecommunications services operation where sales rose just 5% to 147.7m pounds. Defense electronics was also a poor performer with a 2.4% rise in sales to 114.8m pounds while industrial electronics was the most successful activity, increasing revenues by 7% to 160.5m pounds. Chairman Sir Ernest Harrison sees a major opportunity for the company in the forthcoming consolidation of the European defense industry, and Racal has just picked up 50m pounds worth of defense orders and formed a new subsidiary with Thomson-CSF Communications called MBN Ltd. The new venture will cater for the global requirement for multimedia, broadband military communications networks.
