Cannon Street back in black at pounds 5.5m under new team

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A YEAR and a half after the arrival of new management, Cannon Street Investments returned to the black, with pre-tax profits of pounds 5.5m last year after losses of pounds 115.5m in 1992.

Although exceptional write-offs of pounds 57m in 1992 arising from drastic restructuring dramatised the improvement, the mini-conglomerate moved from losses of pounds 66m to profits of pounds 6m at the operating level.

Tom Long, chairman, said: 'Ideally we would not be starting from where we are, but none of the remaining businesses are causing us sleepless nights.'

Results improved in all the group's divisions, with further disposals of unprofitable subsidiaries. Turnover fell 25 per cent to pounds 179m.

Hotels and leisure continued to make losses because of a disappointing performance by Cotswold Travel, the group's tour operator, although these fell from pounds 384,000 to pounds 245,000 in 1993. Results at the three hotels - Cameron House on Loch Lomond, Craigendarroch on Deeside and the Westpoint Hotel in East Kilbride - had been 'satisfactory to good', despite testing conditions in the market.

Food and drink distribution made profits of pounds 1.3m, compared with losses of pounds 856,000, following the disposal of the wine importer Thierry's.

The electronics distribution arm saw profits rise from pounds 1.1m to pounds 5.6m. Mr Long said the group's resources would be concentrated on developing these businesses, which accounted for more than half of turnover.

Network, a television components business, established a successful joint venture in Romania, with sales of pounds 30m last year. CSI is considering similar opportunities in other parts of eastern Europe, setting up joint venture television assembly facilities to create a market for the components exported by Network. David Smith, chief executive, said: 'Providing Network is paid for the components, there is very little risk in such ventures.'

The company said profits at Altai, which distributes consumer electronics items such as telephone and audio-visual accessories, advanced significantly in 1993, especially on the Continent.

The return to profitability nearly halved net borrowing to pounds 25.4m at the end of 1993, and took interest payments from pounds 7m to pounds 2.7m.

There was no dividend. Following a capital restructuring in March, dividends could be declared from subsequent profits, but CSI stressed that it has a pounds 2.5m overhang of dividends owed to preference shareholders. The shares were unchanged at 341 2 p.