Outlook: GEC facelift
Thursday 06 May 1999
The rewards of such a reclassification are obvious. IT stocks tend to be much more highly valued than electricals and electronics, the now unglamorous sector classification GEC presently inhabits. Such a reclassification alone would get Lord Simpson most of the way towards his goal of a doubled market capitalisation within five years.
The problem is that much as GEC would like to think of itself as now a fully fledged telecommunications and Internet stock, it is very much in the low growth areas of these markets. GEC still - er - makes things. True, if all goes according to plan, it will soon be out of defence electronics. Nor will its making of things be confined to Hotpoint washing and Averys weighing machines. GEC's famous cash mountain has been used to buy into some of the world's highest tech manufacturers in the world of telecommunications and internet access.
But in the end, these acquisitions are still in the business of manufacturing, and while their growth prospects may be a good deal better than those of traditional manufacturers, they are not nearly as good as the service providers they supply.
The second rather misjudged aspiration is that of doubling the company's market value over five years. In itself this is a completely meaningless goal, as well as being a potentially misleading one. Crucially it depends on what happens to the stock market, which is entirely outside Lord Simpson's control. Assuming he means all other things being equal, it also depends on how much equity he intends to issue in pursuit of his information technology quest.
Lord Simpson and his finance director at GEC, John Mayo, appear to have pulled off a remarkable transformation in their company's affairs. The message hardly needs embellishing in this way.
- 3 Oil tanker with $100 million cargo goes missing off Texas coast
- 4 George Galloway attacked on Notting Hill street by man 'shouting about the holocaust'
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Oil tanker with $100 million cargo goes missing off Texas coast
George Galloway attacked on Notting Hill street by man 'shouting about the holocaust'
Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- < Previous
- Next >
iJobs Money & Business
£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...
£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...
£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...
£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...