Telemetrix Plc has continued its acceleration into profit, posting interim results showing pretax profits up by 1078.2% to UKP7.9m. The company, which made net profits of UKP3.5m against losses of UKP1.4m last time, upped its turnover by 31.4% to UKP61.5m. The results will make shareholders happy, as earnings per share rocketed to 3.8p from a loss last time. The increase in profit is hardly surprising, as all of Telemetrix’ subsidiaries have been profitable this year. UK-based manufacturers Zetex and Trend, which manufacture semiconductors and telecommunications test equipment respectively have increased operating profits by 54.6% and 175.3%. GTI Corp, Telemetrix’ majority owned magnetic component supplier accross the Atlantic, whose performance has been reflected in the UK company’s share price, still contributed the lion’s share of the profit increase, due to its size. Although its profit only grew by 102.6%, GTI still represents 69.8% of the group’s overall business. GTI’s profit increase was due to the rise in sales of products from Valor Electronics Inc, in which GTI owns a majority shareholding. It owns more now, following the acquisition of another 6.4% of Valor equity for $10.5m, bringing GTI’s holding to 97.2%. The remainder of the stock will be bought in the next two years following an agreement between the companies in 1990. Although the latest share purchase dilutes Telemetrix’s holdings in GTI, it still has a 58.3% majority. Meanwhile Zetex’s increase was due largely to strong performance in the UK and the US, and the strong profit increase from Trend is the result of the company’s restructuring last year which moved it out of the defence market and into its current sector. Before the move, Trend is said to have been losing roughly UKP40,000 per month. The other two Telemetrix companies, located in Zimbabwe, stayed static at UKP1.5m but operating profit shrunk 33.2% to UKP0.3m because of the high inflation rate. Other contributions to the increased turnover include UKP2.4m for the sale of fixed assets and property – the group concluded the sale of its Rasterex A/S Norwiegan graphics company to the management. The firm had been making losses of UKP200,000 which would have been higher this year according to Telemetrix. A freehold property at Tewkesbury once the company’s headquarters – in the UK was also sold for UKP2.2m with a UKP250,000 negative equity. The signs are that Telemetrix’ growth this year will plateau out later to a more sedate level now that the company has seen the benefit of restructuring or selling its loss-making operations.

Philippines

By Telemetrix’s own admission, the Valor products cannot be expected to sell as well as they are for much longer, and the company benefitted from a short period of double ordering which has now been cleared up, but which means that profit growth will be disproportionate. This may be partially countered by next year’s increased input from the Treuhandanstalt East German plant which Zetex purchased for a nominal one mark on condition that it keeps on 68 of the 85 staff for three years, investing UKP500,000 in the plant over the same period. With this plant, which it previously used on a subcontract basis, it is hoping to increase semiconductor production by roughly 40% by January 1994. In addition, Valor will also be bringing to market Integrated Services Digital Network and Flash memory products. The group, which has increased its cash revenues to UKP2.7 excluding GTI reserves from a deficit of UKP400,000 in December 1992 last time, is hoping for organic growth but would not rule out an acquisition if the right opportunity arose – its mobile paging business in Zimbabwe could benefit from a microwave components company, hinted chief executive Tim Curtis. As part of this organic growth, the company spent UKP2.6m this year buying a surface mount assembly plant in the Philippines.