Depressed margins keep Psion sluggish

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PSION, the portable computer manufacturer, announced profits at the lower end of already reduced expectations, despite recovering strongly from losses in 1991. David Potter, chairman, said: 'Margins were lower than budget, resulting in a less-than- satisfactory return on sales.'

He said the development of in- house manufacturing, which now accounts for 65 per cent of Psion's production, would help bring unit costs down. Sterling's weakness would give international sales a boost.

Sales rose 64 per cent to pounds 35.1m but the costs of introducing a new hand- held electronic organiser, the Series 3, and the high level of sterling for most of 1992 meant that pre-tax profits in the year to December only reached pounds 1.42m. Analysts forecast twice that amount earlier in the year. In 1991 there was a pre-tax loss of pounds 2.2m.

Retail sales benefited from Series 3, which was introduced in autumn 1991 and sold 105,000 units last year, slightly more than the competing product from its main rival, Hewlett- Packard. The usually high-margin corporate division suffered from depressed capital expenditure, but Mr Potter said the market for hand-held computers remains the fastest-growing area of the information technology industry.

Earnings per share were 4.33p after a loss in 1991 of 8.13p. A final dividend of 1.5p makes a total for the year of 2.5p, a 4 per cent increase. Psion's volatile shares, which reached a high of 377p in 1989 before plunging to a low of 40p in 1991, eased 1p to 120p.