ICL turnaround `disappointing'

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ICL, the computer giant, yesterday admitted the scale of its financial turnaround since the sale of its manufacturing operations last year had been disappointing. Keith Todd, ICL's chief executive, also reaffirmed his commitment to float the company on the stock market before 2000.

The results followed ICL's latest bout of restructuring under the 90 per cent ownership of Japanese electronics giant Fujitsu.

A five-point plan to boost profitability included selling the manufacturing business, D2D, to a Canadian company and shifting ICL's focus towards consultancy and service activities. The upheaval was softened by a rights issue raising pounds 200m.

Yesterday Mr Todd said the transformation of ICL was complete but argued the revenues streams from large new contracts would not appear in volume until 1998-99. A pounds 1bn contract with the Post Office to introduce electronic social security benefits payments would net an estimated pounds 200m in additional revenues.

ICL's sales last year shrank by almost pounds 200m to pounds 2.92bn, reflecting the sale of businesses. Losses before tax dropped sharply from pounds 188.3m in 1995 to pounds 2.5m. However the improvement came largely because the impact of the restructuring process was concentrated on the 1995 results, with a pounds 151.5m exceptional charge. Excluding this, ICL's operating profits fell last year by pounds 6.7m to pounds 25.2m. Mr Todd said profit margins were still just 1 per cent, compared with the group's internal target of 6 per cent.

The results came as Mr Todd outlined a bold new vision for ICL in partnership with Fujitsu to market an Internet-based product which would link computer users around the world.