Acorn back in black with new products

SHARES in Acorn Computer slumped by almost 14 per cent to 36.25p yesterday, despite the company's return to the black in the first half to 3 July, writes Neil Thapar.

A taxable loss of pounds 420,000 last year has been turned round to pre-tax profits of pounds 511,000 on sales up from pounds 18m to pounds 21m.

Analysts said the share drop was due to profit-taking by investors, who have seen them soar from a 6p low in the past 12 months to 46p three weeks ago.

They have surged ahead on hopes that an advanced new range of computers will produce strong sales growth.

The results reflect a fall in interest costs from pounds 538,000 to pounds 139,000 in the first half. But the company was hit by a pounds 99,000 loss at a related business.

Acorn, which is controlled by Olivetti of Italy, said that a tight control on costs enabled it to continue with an 'aggressive' research and development programme that has resulted in the development of a new product range. Its Australian and New Zealand subsidiaries improved operating profits.

In addition, Acorn's 46 per cent-owned subsidiary, Advanced RISC Machine Holdings, the computer chip maker, continued to meet its targets.

With no tax to pay, earnings soared to 0.8p a share against a loss of 0.6p in the previous year. There is no interim dividend.