Tunstall to expand into new subsidiary

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The Independent Online
TUNSTALL GROUP hopes to create 400 jobs over the next two years by rehousing and expanding its design and manufacturing business as a new subsidiary called Mion Electronics, writes John Shepherd.

The shares advanced 20p to 560p on the news, which was accompanied by a prediction from the communications and security company of a 21 per cent increase in annual taxable profits to pounds 6.4m for the year to last September.

Sales of pounds 10m are forecast for Mion in the year to September 1994, but its contribution to group earnings will be minimal because of start-up costs. A 6,000 square metre factory is expected to be built for Mion next year near Barnsley, South Yorkshire. Capital expenditure in the next four years will be about pounds 11m.

Finance is coming through a pounds 2.5m grant from the Department of Trade and Industry, a pounds 5m five-year loan from the European Coal and Steel Community and the rest from Tunstall's own resources.

In addition to the projected increase in group profits, Tunstall plans to lift the final dividend from 3.75p to 4.5p, making a total payment of 7p, up from 6p.