ICL to sack a further 1,000 workers
Saturday 09 March 1996
The group will also cut up to 1,000 jobs in its remaining businesses in addition to 1,300 implemented or announced over the last 12 months.
Keith Todd, chief executive, said ICL was still intent on re-listing on the London Stock Exchange, originally intended to take place last year. He said: "Flotation will happen. I am committed, the board is committed and the shareholders are committed. The only question is when.
"We already have sound revenue growth but my overriding priority now is to increase profit and maximise shareholder value."
Mr Todd also said that ICL planned a pounds 200m rights issue, underwritten by Fujitsu, to strengthen the capital base and invest in the core activities of systems, software and services.
Last year ICL slumped to a pre-tax loss of pounds 188m, after exceptional charges, from a profit of pounds 28.4m in 1994. The combined operating losses of the personal computer and electronics manufacturing operations were pounds 57m. The losses, announced yesterday, were in spite of a 17 per cent increase in revenues to pounds 3.1bn and due largely to squeezed profit margins and fierce competition.
Under the restructuring plan, the design and manufacture of ICL personal computers will be demerged and combined with Fujitsu's own PC business, with ICL retaining a small stake. The operations to be demerged employ 2,000 people in several European factories and had a turnover last year of pounds 650m. Initially at least, PCs made by the new combined business will continue to bear the joint Fujitsu/ICL brand.
The electronics manufacturing arm employs 2,200 people in the UK - principally in Manchester and Stoke-on-Trent - and has a turnover of about pounds 350m.
ICL is seeking a "partner" to buy the majority and will retain a stake of less than 20 per cent. It already manufactures under contract to rival computer firms and will continue to do so for ICL once it is sold.
Mr Todd said: "ICL is now a much clearer proposition - a computer system and service company. We are focussing ICL firmly on its core business and will accelerate the profit recovery."
The dramatic shakeout comes less than three months after Mr Todd moved into the job from the previous post of finance director. His accession followed the appointment of his predecessor, Sir Peter Bonfield, as chief executive of BT.
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