Racal Electronics Plc and its highly successful subsidiary, Racal Telecom Plc, have produced the sort of interims that other companies dream about, although neither performances were reflected in massive share movements. Racal Electronics started the day at 239 pence and finished at 240 pence, Racal Telecom was at 389 pence and rose to 403 pence. Racal Telecom has reported an astonishing UKP81.2m increase in turnover at UKP193.8m, compared with UKP112.6m for the same period last year, and pre-tax profit jumped to UKP75.1m, up UKP44.5m from UKP30.6m. Earnings per share also increased to 5.36p from 2.17p. Gerry Whent, Racal Telecom’s chief executive officer, was understandably pleased with the first half results, and even losing the German cellular licence to Mannesmann Kienzle didn’t seem to perturb him unduly. The number of subscribers to the company’s core service, the Vodafone network, now stands at 400,000, an increase of 100,000 over the past year, and it expects that figure to reach 500,000 by the end of the second half. On a quarter by quarter comparison, growth between October to December should exceed the previous three months, and Racal Telecom claims that the usage per minute figure over a weekly period is three times higher than Mercury’s. Incoming traffic as a percentage of revenue has increased slightly, and now represents 35% compared to 33% last year, and 30% of revenue is derived from London traffic. The percentage of hand-held portables on the network has also nudged up by 2% to 19%. Non-Vodafone business was mixed, with Vodata proving more profitable than Vodafone, and Vodapage set to move into profit in the last quarter. Vodac continues to be a loss-maker, and Whent attributes this to low terminal prices and lack of access and availability time, and he sounded a warning that service providers are going to start reducing dealer subsidies. He also revealed that the number of available ETAC channels in London has recently increased by an additional 120, and of the former 200, some are being used in the provinces. The company has finally exercised its right to buy up the Plessey share of Orbitel Mobile Communications. Whent wouldn’t reveal the cost beyond saying it was equal to that which Plessey paid in the first place, with some added interest. As regards new partners, Racal Telecom is currently listening to proposals, but is now insisting that potential partners can bring more than money to the cellular equipment party. On Personal Comunication Services, Whent expects PCN players to enter the market with a macro cell network, which Racal Telecom already has, and to be providing a reasonable service by 1993, with PCN following in a year or two. It says it will add PCN to its cellular network, and intends to be both supplier and operator.
