Amstrad in buying mood
Friday 06 October 1995
Back in black and increasingly confident, Amstrad plans to hit the acquisition trail, with as much as pounds 300m to spend on compatible companies.
"We are not interested in small acquisitions," Alan Sugar, company chairman, said yesterday. But the usually outspoken Mr Sugar refused to specify sectors where the company might expand.
Amstrad announced pre-tax profits in the year to June of pounds 3.1m, compared to a loss to June 1994 of nearly pounds 20m. The results were ahead of expectations, helping fuel a 12.5p rise in the share price to 268 5p. The small profit reverses four years of red ink at one of the fastest-growing companies in the 1980s. David Rogers, chief executive, said the figures proved that "recovery was well on the way." However, he added that "we won't be satisfied until we have positive growth at ACE," ,the company's main consumer electronics division, and makers of the trademark Amstrad computers, faxes and other electronic equipment.
Viglen, the computer company bought last year for an initial consideration of pounds 30m, performed in line with expectations, he said, while Dancall, the mobile phone manufacturer, came in under forecasts due to delays in production.
Mr Sugar blamed the length of time it took to receive approval for the Dancall digital mobile phone technology in several countries, and estimated the operations were about four months behind schedule.
Dancall spent pounds 8m last year on building up its manufacturing operations, and hopes to sell about 800,000 handsets a year. Total capital expenditure was pounds 14m.
The mobile phone market is believed to be Amstrad's best chance of regaining momentum in the consumer electronics sector. Other new products include Dataflex, an all-in-one fax, modem and answerphone that Mr Sugar calls the "all-singing, all-dancing product".
Analysts said the full year results were encouraging and expected profits to rise sharply this year and next.
Investment Column, page 27
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