Amstrad takes pounds 6.4m knock

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The Independent Online
Amstrad, the computers to mobile telephones group headed by Alan Sugar, yesterday unveiled a further pounds 6.4m exceptional charge for its withdrawal from its disastrous foray into consumer electronics. But analysts were cautiously suggesting the worst may now be over for the group, which has had an unhappy relationship with the City for years, and the shares gained 10p to 174p.

The latest cost comes on top of pounds 10.7m of charges taken at the end of last year for dealing with the then loss-making audio, video, television and fax operations. At the time, that was said to be the last of the costs associated with the business, but Mr Sugar said it had been difficult to judge what would be realised from the old stock. "We had a job to dispose of pounds 70m of inventory and the pounds 6m is the difference in the margin we thought we were going to earn on that and we didn't earn it."

The latest charges meant Amstrad remained in the red for the six months to December, although losses were cut from pounds 5.4m to pounds 1.78m. At the operating level, the group turned a deficit of pounds 8.79m into a profit of pounds 1.91m. A maintained interim dividend of 1.25p is uncovered by a loss per share of 2.4p. However, the group's net cash climbed from pounds 91.2m to pounds 112m over the course of the year, representing 69 per cent of shareholders' funds.

Mr Sugar said he was still considering ways of handing back cash to shareholders. But he warned that any plan would have to be thought out carefully.