Bookham: more cuts needed to break-even

Bookham Technology, which makes optical components for telecoms networks, yesterday warned costs would have to be cut further while revenues would have to hit around £75m before it reached break-even.

While the loss-making company noted it had cut its cash burn further in the third quarter of the year, it warned this would rise again before settling back to current levels in mid-2003.

Cash burn in the three months to 29 September was £11.8m – down from £13.7m in the second quarter of the year and down from £15.4m a year before. The company, which has some £137m of cash remaining, would not predict when it might hit break-even but said that costs still needed to be 40 per cent lower.

Bookham announced that revenues in the third quarter were £7.6m, a 6 per cent jump from the second quarter and a 217 per cent jump from the same quarter a year ago. "The third quarter was a good quarter, with revenues up and cash burn down, notwithstanding the difficult market environment," said Giorgio Anania, Bookham's chief executive.

The company said sales to clients excluding Marconi fell 6 per cent from the previous quarter.

But Bookham's net losses, before restructuring charges, narrowed in the period to £13.5m from £15.3m in the second quarter of the year. After exceptional items, however, pre-tax losses swelled to £22m from £13.6m a year before.

Bookham also predicted revenues in the current quarter would increase by at least 50 per cent from the third quarter figure if its acquisition of some of Nortel Networks' businesses goes ahead.

That deal, which is expected to be completed by the middle of next month, would also see revenues double from the fourth quarter to the first quarter of next year.