Bottom Line: Prestwick presses on

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The Independent Online
HAVING joined forces to install a management team from the company doctors Postern into Prestwick Holdings, it would be rather churlish if shareholders now refused to back the hefty four-for-five rights issue to raise pounds 4.5m.

They could, if Postern is right, see a decent return on their shares for the first time since Prestwick came to the market in 1985.

Its plans are not based on infinite demand for mobile phones - one of the big money-earners of the moment - as was the case with previous fashionable products like the ZX Spectrum until demand suddenly disappeared. Instead, it will try to spread its customer base outside cars and telphones, now 70 per cent of its business.

It has also blocked the drain from acquisitions of the previous chief executive by closing Northumbria Circuits and, yesterday, selling Electroconnect to its management.

If these two are excluded, the forecast pounds 1.3m pre-tax loss would have been a pounds 765,000 operating profit, and the rights will leave it debt-free.

A capital reconstruction will allow it to resume dividend payments, once the pounds 333,000 preference arrears are paid off. At 24p, the rights are hardly at a generous discount, particularly given yesterday's 2p fall to 27p, but they may be worth the risk.