Amstrad bounces back into black
Wednesday 10 February 1999
Although Tesco and other retailers have been selling Amstrad televisions and video recorders for as little as pounds 99, profits in the half year totalled pounds 4.1m, compared to a loss of pounds 900,000 in the same period last year. Amstrad admitted that business with supermarkets is low margin but said the huge volumes involved made up for the relatively low mark-up.
The launch of set-top boxes for digital television in October is a key reason behind the sales boost of 47 per cent although Amstrad has not disclosed the number of units sold.
Amstrad will increasingly have two strands to its business. It has the steady, lower growth consumer products operations selling traditional technology such as TVs and videos.
Added to this is the more focused product range developed by the group's in-house design team. This includes the contract with BSkyB and an agreement with Cable & Wireless to sell a range of C&W branded phones, largely for domestic use.
Waiting to be launched are new products such as the Phone Book, an address book that can be plugged into a telephone and which is expected to retail for pounds 99. The success or otherwise of these new products means Amstrad shares are likely to be volatile as opinions will be formed on the product lines' prospects in the next six months.
Indeed, last year Amstrad shares plunged as low as 27.5p fuelling rumours that Mr Sugar would move to take Amstrad private. This followed his decision to increase his stake in Viglen, the personal computer company, to 72 per cent. However, Amstrad shares have recovered to 50p, up 1.75p yesterday, and Martin Bland, finance director, said Mr Sugar has "no plans to take the business private".
On Beeson Gregory's full year forecast of pounds 6m, the shares trade on a forward multiple of less than 10. The house broker is positive on the shares saying the upside lies in the new product launches. But it could be a bumpy ride.
- 1 The political parties aren't all the same – which means 2015 will be a 'big-choice' election
- 2 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 3 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
UK weather: Warning for more snow and ice as freezing temperatures and gales hit Britain
New York police shooting: thousands turn out for the funeral of Rafael Ramos
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Immigrants make UK racist, says Ukip councillor Trevor Shonk
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...