Plessey Co Plc yesterday confirmed that the company’s offers to buy or sell its stake in GEC Plessey Telecommunications Ltd have been rejected by GEC Plc and Siemens AG. Announcing the company’s annual results, Plessey said that it had approached GEC and Siemens, together and separately, as part of its defence against the two companies’ hostile bid. Plessey also accused GEC of abusing the timetable for its acquisition bid, in a deliberate attempt to protract negotiations, destabilise Plessey, and weaken its ability to fight the threat to its independence; Plessey also blamed the bid for the loss of many lucrative long term deals, pointing out that in many contractual negotiations it was competing against GEC itself. Despite delays to planned reorganisations caused by the bid, Plessey was able to report pre-tax profits up by 14% at UKP195m in the year to March 31; turnover rose 27% at UKP1,655m; earnings per share were up 10% at 17.57 pence. Of Plessey’s turnover, UKP220m was derived from acquisitions during the year. Managing director Stephen Walls claimed that City estimates of Plessey’s value have been too low, taking into account market changes since the November bid, when Plessey’s share price was 225p: he said a figure of around 300p was realistic. Walls added that since the bid, the company has had recruitment problems and lost the chance of a number of collaborations. Two businesses, microelectronics and components and networks and services, were highlighted as important growth areas; the former showed turnover up 56% to UKP190m, the latter turnover up 149% to UKP172.8m; the company said that networks and services could even be Plessey’s largest business within five years. The company expressed doubts as to the future of GEC Plessey in its present state, given relations between the company’s two parents; the turnover for Plessey in the joint venture was worth UKP576.5m; Stromberg Carlson made an undisclosed loss in the year. In defence electronics, Plessey’s largest sector with a turnover of UKP607.3m, 35% of business was from the UK Ministry of Defence – that’s down from 50% in the mid-1980s.
