GEC board asks Weinstock to stay at helm for two more years: Fall in operating profits offset by interest on cash

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The Independent Online
LORD Weinstock will stay on as managing director of The General Electric Company for another two years at the board's request, Lord Prior, chairman, said yesterday.

Although there was no news of a possible successor to Lord Weinstock, who is 70 on 29 July, the announcement did reveal that the managing directors of GEC's three most important activities - power systems, electronic systems and telecommunications - were to join the board.

Full-year figures for GEC showed barely increased pre-tax profits of pounds 866m for the year to March (pounds 863m) and a 5 per cent increase in dividends to 10.82p with a final of 8.01p.

A fall in operating profits from pounds 695m to pounds 684m was offset by a rise in net interest income from pounds 149m to pounds 162m as GEC's holdings of net cash, including joint ventures, rose from pounds 2.2bn to pounds 2.8bn.

The results were below City expectations, despite a profits warning in December, and prompted a 24p fall in the share price to 270p.

Lord Prior also warned that some of GEC's poorly performing businesses outside its three core activities would be sold off if they did not achieve profitable enough positions in their various markets.

Despite good performances from Picker, a medical diagnostic imaging equipment maker, Gilbarco, the fuel dispensing group, and Videojet, a leader in continuous inkjet printing, profits in GEC's non-key businesses have fallen from pounds 206m to pounds 163m over the past five years.

Lord Prior said the recent performance of Avery and Berkel, the commercial weighing companies, and AB Dick, the office copier manufacturer and distributor, were unsatisfactory. Analysts believe they could fetch pounds 200m.

The sale of GEC's interests in domestic appliances, through Hotpoint and Creda, 50 per cent-owned with US General Electric, its semi-conductor and instrumentation activities and other interests in distribution and general industrial goods could generate another pounds 600m.

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