Unitech's shares soar on 62% rise in interim profits

SHARES in Unitech, the electronic components group, jumped 20p to close at 314p after the company announced a 62 per cent rise in interim pre-tax profits to pounds 7.4m, writes Diane Coyle.

Behind the strong gain lay higher profits of pounds 5.2m from its 50.6 per cent stake in Nemic-Lambda, a Japanese power supplies manufacturer. Peter Curry, Unitech chairman, said: 'We were able to buck the trend in Japan because of our strong market position and because of the ability of the Japanese management to cut costs.'

Unitech's control products division, which makes components for heating and ventilation systems, more than doubled its profits to pounds 2.8m. The connectors division, producing components for the semi-conductor and telecoms industries, made a loss of pounds 1m.

Mr Curry said: 'Over the past three years we have continued to reduce costs while maintaining our investment in new product development.' Unitech plans to specialise further in key components that its customers are increasingly buying from outside suppliers rather than producing in-house.

The interim dividend was up from 2.1p to 2.8p, and earnings per share rose from 3.4p to 4p.