Telspec Plc’s first full year since flotation has been one of dynamic growth for the Rochester, Kent- based telecommunications equipment company. Chairman Frank Hackett-Jones reports order books bulging at ú62m, double what they were a year ago. Pre-tax profits were up 92% to ú6.6m from turnover 107% ahead at ú36.3m. The company has continued to expand its customer base across Europe, and orders have been particularly strong for the digital pair gain and new ISDN products. It won orders worth more than ú10m for ISDN products in the last quarter from two European telecommunications companies. Deutsche Telekom AG is one, and the other one is believed to be British Telecommunications Plc. In Germany, Telspec GmbH has continued to win pair gain orders, as well as other ISDN business due for delivery this spring, with the contract ending at the end of next year. Telspec set up in Madrid last November to serve both the Spanish and Latin American markets, where an order had already been received from Argentina. An engineering group will be set up in Spain this year to support these markets. Following the move to double shift working in both Kent and Melbourne, Australia, Telspec acquired GRI Electronics Ltd in September for about ú600,000, adding 51,000 square feet of manufacturing capacity in Perth, Scotland with a long term option to double the area on the same site. Production is currently at about two-thirds capacity, so there is no immediate danger of under-capacity, according to chief executive Garth Riley. An ISDN production line has been installed there with a new high-capacity line becoming operational in the second quarter to handle volume production of pair gain systems for both European and world markets.
Free trade zone in Izmir
The contract to supply pair gain equipment in Slovakia was largely completed last year and the joint venture company, in which Telspec owns the majority stake, is in the last stages of negotiating for more business. Plans to set up in Turkey had been postponed in the past, but a manufacturing operation was finally set up in a free trade zone in Izmir at the start of this year. The company – 85% owned by Telspec – should start manufacturing in the second quarter. A sales and marketing subsidiary was also set up in Istanbul to provide support and help Telspec break into Middle Eastern markets. This Turkish activity was spawned from a ú2m order for line concentrators that began shipment last year. Business in Australia has turned around after a disappointing 1993 for both the analogue and digital products. Sales have also begun in a number of south-east Asian markets and the company expects significant growth in this area in 1995. During the year, the company spent ú2.1m on fixed assets, the most significant of which was the purchase of GRI Electronics. Hackett-Jones expects the cash position to be positive again by the second quarter, following net borrowings of ú277,000 caused by increased working capital requirements. The tax charge for 1994 is after relief for research and development and the benefit of tax losses and timing differences of ú137,000 all told from the Australian operation. The company does not expect such benefits this year. A final dividend of 2.5 pence will be paid, making a yearly total of 3.7 pence; no dividend was paid last time.
