Companies: TTG   

Electronics firm Pressac said trading in its hard-hit markets had improved, as it reported a 2001 pre-tax profit of £7.1 million – before £22 million exceptionals costs – and confirmed that bid talks were continuing with several potential suitors. However chief executive Huw Lewis is about to leave, with a replacement already having been lined up, Ben Cobley reports.

techMARK-listed Pressac (PRSC) witnessed a £30 million fall in turnover last year to £163 million and issed three profit warnings along the way. Operating profit fell from £26.3 million to £7.2 million in 2001, before write-offs and other exceptional costs sent it nearly £15 million into the red.

Pressac's problems have been particularly acute in the mobile phone market. Its operations were hit by the closure of Motorola's facility in Scotland, Ericsson's decision to withdraw from phone manufacturing and the general relocation of production to China and the Far East. The company was also hit by problems revealed soon after its August 2000 acquisition of mobile phone cover maker WH Smith. Its 2000 accounts made a £12.8 million goodwill write-off for this business, and a legal case concerning breach of warranty is due to go to the High Court on 1 October.

Last year also saw substantial exceptional costs relating to the closure of several manufacturing facilities, redundancy costs, reorganisational issues and further goodwill write-offs. When asked if investors had seen the last of such costs, chairman Roger Boissier said: 'I do hope so. I hope it all gets sorted out so [future chief executive] Chris Woodwark can get on with rebuilding the business'.

Woodwark will take the reins as chief executive on 1 May after cuurrent incumbent Lewis decided to resign, allegedly in connection with a failed management buy-out attempt. His replacement, who should then become executive chairman at the AGM, has experience in breaking up salt and support business Staveley and is an adviser to private equity firm Alchemy. He also has substantial experience in the automotive industry.

Boissier added that Pressac was considering the future of its mobile phone components arm as a standalone entity, but that it was unlikely to sell it, even as the group's focus shifts towards the automotive and fixed-line telecoms sectors.

He confirmed that Pressac was still talking to 'a number of companies' about selling the whole business, although he refused to reveal what he thinks it is worth. Fully-listed automotive and telecoms-focused TT Electronics (TTG) is a potential buyer. It recently raised its stake in Pressac to 8.2 per cent, while Unicorn and Eaglet together hold 43 per cent.

Boissier said: 'The first quarter of 2002 is encouraging, and the year should reflect a partial recovery'. He added that, in the longer term, new business wins and a reorganisation 'should see the group re-establish satisfactory margins, performance and profitability'.

Pressac's net assets (not including intangibles) amounted to £30 million at year-end. This compares with a £20.4 million market capitalisation on the current 23.5p share price, up 3.5p on the day.