Cost-cutting boosts Control Techniques: Round-the-world network of sales and service centres is key to growth

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COST-CUTTING and organic growth helped Control Techniques, the motor drives supplier, to boost profits 47 per cent to pounds 9.1m in the year to the end of September.

But the fast-growing company, based at Newtown, Powys, warned that the rate of growth in its order book had slowed in recent months.

Trevor Wheatley, chairman, said economic conditions in Control's principal markets remained weak and he did not expect great improvement. But it was positioned to expand sales and increase profits even in such an environment.

The key to Control's growth has been its CT Drive Centres, which sell and service its products. There are now 24 of these dotted around the world, leaving the company half way to its target of 50.

The company opened centres in Istanbul, Barcelona, Madras, Linz in Austria and Dallas and Charlotte in the US this year.

Its strategy with acquisitions has been to close down the operations bought and bring the manufacturing capacity back to its Welsh headquarters, where economies of scale can be achieved.

Yesterday's figures included rationalisation costs of pounds 700,000 relating mainly to a restruturing of its US subsidiary, now named Control Techniques Inc.

Mr Wheatley said the moves should reduce group costs by a total of pounds 4m a year, rising to pounds 5m on an annualised basis if savings made in Britain and Germany were included.

Yesterday's figures benefited by pounds 1.7m from the cost savings.

Control's total sales, 85 per cent of which are outside the UK, were 20 per cent ahead at pounds 105.3m. Michael Robins, finance director, said that the devaluation of the pound had helped the company to defy the poor economic conditions.

'Our products have also remained in demand, despite general cutbacks in capital investment, because they often help customers reduce costs by improving efficiency and saving energy,' he said.

The total dividend jumps from 6.85p to 7.5p on earnings per share that rose 56 per cent to 15.3p. Mr Wheatley said he was particularly pleased to have restored dividend cover to a level appropriate for a company that needed to spend a lot on research and development.

The shares rose 16p to 345p.