Last month’s acquisition of the Trend Group Ltd by Tewkesbury, Gloucestershire-based Telemetrix Plc seems to mark another step in Telemetrix’ strategy to become a major international electronics group – an that which does not necessarily seem outside its grasp after the announcement that turnover for the half was UKP19m against UKP4.5m last time. In July 1985, Telemetrix was being tipped as the next bright young thing of the high-tech sector with a pre-tax profit of UKP4.7m on turnover of UKP20.2m, but since then this potential British success story has had a rough time of it. One obvious reason for the swift fall from grace was the bottom falling out of the graphics terminals market in the autumn of that year, leaving Westward Microsystems, the core subsidiary of Telemetrix, in dire straits. But it has been consistently argued that the main cause of all the problems was the fact that, despite Telemetrix’ reputation for sound leadership, it hung on to what has been described as a rag-bag of unrelated subsidiaries – Isoplastics, producers of polyurethane mouldings, springs to mind as one example – to the extent that direction was not properly focussed and growth rate suffered as a consequence. This was at a time when Westward was seeing its high performance terminals being priced out of the market. With the advent of powerful microcomputers and workstations such as the Sun Microsystems Sun-3 and the DEC MicroVAX II, the CAE and CAD markets, the main target area for Westward’s terminals, slowed dramatically. There was of course no reason per se why its terminals could not have been sold to work with the new Sun and DEC products, the problem was, however, that they were now considered too expensive: low-end terminals such as the Tektronix were preferred. Only in October 1987 did Telemetrix move into the low-end of the market with a range of three 20 monitors and the 80386-based Personal Graphics Series. Despite impressive sales, and the handing over of Westward’s US division to Genisco Computer Corp of California in return for Genisco’s UK marketing operations, Telemetrix made a loss of UKP1.6m in 1987 and in May 1988 asked for trading in its shares to be suspended at 33 pence pending an announcement. Capital restucturing was imminent, and three days later South African firm Allied Electronics Corp came to the rescue taking a majority stake in the company. Altron’s intention – and here we see Trend’s possible future role – was to diversify Telemetrix away from graphics terminals towards a European scale graphics and telecommunications company – although this contained a note of irony, since the telecommunications – orientated Telemetrix Research division was sold to Richaware Ltd. Since Altron’s takeover, Telemetrix’ loss-making subsidiaries have been disposed of, and a clearer structure has emerged. San Diego, California-based GTI Corp, where Telemetrix has a 53% share, makes up one complete arm of the operation; the graphics and displays side is handled by Westward, Westward GmbH and Scandinavian acquisition Rasterex; Zetex UK and and the English firm Component Trading make up the components division, and the communications and data arm is the responsibility of The Trend Group.
Lay-offs at Trend
Formed in October 1986 with a complete management buy-out from Phicom, using UKP9.5m of help from 3i, Trend comprises Trend Telecommunications, which is in the secure systems business, as well as supplying digital data communications test equipment and terminal equipment for telex and electronic mail users; Trend Datalink, which designs, tests and maintains both local and wide area networks; Trend Denmark, which runs a similar operation in Denmark; and Trend Dataspeed, set up a year after the buy-out, distributors of third party data communication products. Telemetrix has big plans for Trend: apart from forming the cornerstone of its communications and data divishn in Europe, Telemetrix also sees potential profits to be made in the secure communications area, and in providing services to private network operators. Trend’s
trading performance for this year has been frankly disappointing, but Telemetrix clearly believes that the capital it can offer means not only survival for Trend, but the chance to use its expertise in a liberalised, privatised European telecommunications market. One immediate consequence of all this will be rationalisation of Trend, with redundancies of around 90 expected to be announced later this week.
