Astec converts power into 90% profit rise

ASTEC (BSR), the Hong Kong- based and London-listed electronics company, reported a 90 per cent rise in pre-tax profits to pounds 14.9m in 1993, writes Diane Coyle. It also paid a dividend for the first time since 1990.

Operating profits improved from pounds 9.1m to pounds 13.1m in the core power conversion business, on turnover up 29 per cent to pounds 235.6m. Astec's share of the world market rose a fraction to 7 per cent, making it the market leader.

In the electronic components division, turnover fell 18 per cent, but operating profits rose from pounds 465,000 to pounds 2m due to cost-cutting. Astec plans to continue concentrating its manufacturing capacity in Mexico and South-east Asia, and is switching production from Hong Kong to China.

The group reduced borrowings to end 1993 with net cash of pounds 7.3m, compared with gearing of 12.7 per cent at the end of the previous year. Anthony Shanagher, finance director, said Astec would look for acquisitions in its core information technology markets.

Current trading conditions are uneven, the company said - strong in North America and the Far East and 'very sticky' in Europe. The 1993 dividend was 0.75p, and earnings per share rose from 2.15p to 4.16p. The shares closed up 2p at 91p.