Amstrad prices likely to be cut

TOUGH trading conditions have prompted industry speculation that Amstrad will be forced to cut heavily the price of its new range of business computers, which use the Intel 486 chip, at its autumn marketing conference next Wednesday.

The new lines have been criticised by the computer press for being too expensive compared with some rivals.

One Amstrad distributor said: 'The corporate market is buying new 486 computers, but Amstrad's prices look high.'

Although the company's products are lower priced than prestige brands such as IBM and Compaq, it is under pressure to trim rates to compete against other makers.

Many dealers believe that the consumer electronics group will announce significant cuts at the conference, to be held at Tottenham Hotspur, the football club headed by Amstrad's chairman Alan Sugar.

An Amstrad spokesman declined to say whether the prices were under review.

The move comes as City analysts expect Amstrad to incur a pounds 75m loss for the year ended 30 June after a fierce price war.

The forecast loss has sparked fears that Amstrad may be forced to pass its dividend after Mr Sugar's comments at the weekend that 'dividends should be paid out of profits'.

Although it has built up a pounds 100m cash pile by offloading surplus stocks at little or no profit, Amstrad shares have been unsettled by the dividend worries.

The shares closed down 2p at 20p yesterday.