Japan slowdown slashes Unitech profits to pounds 12m

THE JAPANESE slowdown has caused full-year pre-tax profits at Unitech, the electronics company, to plunge 35 per cent to pounds 12m from pounds 18.5m on sales of pounds 251.8m, down from pounds 256.8m, writes Rupert Bruce.

Sales at the Nemic-Lambda subsidiary have fallen 8 per cent in yen terms in the year to end-May after growing 18 per cent the previous year.

Unitech is tackling falling demand in Japan and flat demand in the US by moving its power supplies manufacturing facilities to emerging economies where labour is cheap. Its factories in Malaysia and Mexico make power supply equipment for electronic goods.

Earnings per share fell to 7.3p, compared with 11.5p, and the dividend halved to 5.85p from 11.7p. Peter Curry, chairman, said this set a new level for dividend payments.

Trading conditions are improving in the US, while in Europe there are signs of stability returning. Group gearing has fallen to 43 per cent from 61 per cent. The shares rose 6p to 144p.