Sugar to split top roles at Amstrad: New chief executive will concentrate on growth by acquisition

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The Independent Online
ALAN SUGAR countered critics of his autocratic management style yesterday by announcing that he would split the top roles at Amstrad, appointing a new chief executive to guide the company through a planned expansion programme, writes Tom Stevenson.

The news was welcomed in the City, where Amstrad's shares closed 3.5p higher at 48.5p. Last year Mr Sugar failed in an attempt to take the consumer electronics and computing group private in a bid that valued the shares at 30p.

He also outlined a review of the innovation-led strategy that had seen Amstrad create markets from scratch for stacked hi-fi units, low-price personal computers and satellite dishes. 'The company has learnt that there is a price to pay for concentrating its efforts on innovation. We have to recognise that our current products have nothing unique to offer,' he said.

A new structure is to be introduced, with all the existing consumer electronics products in one division. Once appointed, the new chief executive will have responsibility for acquisitions to create the other divisions.

The recent purchase of Dancall Radio, a Danish cordless telephone group, will be a model for future acquisitions, wholly owned but acting autonomously.

Amstrad suffered a larger-than-expected pre-tax loss of pounds 20.5m in the year to June, compared with a pounds 70m loss in 1992. Before a pounds 33.5m write-off to cover the company's withdrawal from Spain, operating profits were pounds 16.3m.

Almost half the profit came from interest received on a cash pile of pounds 167m, up from pounds 114m a year earlier. Turnover fell from pounds 357m to pounds 296m after a partial withdrawal from the personal computers market, where margins remain under pressure.

Earnings per share before the Spanish write-off were 2p, from which a final dividend of 0.2p, making a total of 0.5p, was paid.

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