Marconi shares soar on back of strong growth

Marconi, formerly GEC, delighted the City with its final set of interim results before its name change earlier this week. The company’s shares soared in the wake of upbeat half-year figures revealing strong growth in its communications division – the business that will be the core part of Marconi. Sales in this division were up […]

Marconi, formerly GEC, delighted the City with its final set of interim results before its name change earlier this week.

The company’s shares soared in the wake of upbeat half-year figures revealing strong growth in its communications division – the business that will be the core part of Marconi.

Sales in this division were up 17% on a like-for-like basis, well ahead of the 15% forecast by analysts.

Pre-exceptional profits, meanwhile, jumped 51% to £299m, while the communications division managed a 27% increase to £193m.

A bullish stance by several brokers saw GEC shares leap 58p to 847p on the figures, helped by confirmation from chief executive George Simpson that the group was `very interested’ in a US listing. He declined to give any indication of when this might happen, however.

Simpson said the company’s restructuring was over and growth in the refocused group was accelerating. `Marconi won’t just hit the ground running, it’ll take off as one of Europe’s brightest technology companies,’ he declared.

Some non-core businesses remain to be sold, with the disposals of Avery Berkel and Woods Air Movement expected to be completed by the end of the current financial year.

The sales are expected to give the group significant funding for acquisitions, but Simpson declined to quantify the expected proceeds.

He said the performance of Marconi Electronic Systems, the defence arm merged with British Aerospace on Monday, was in line with expectations, although profits in this part of the business increased by just 1% in the period.

He confirmed that acquisitions were still on the agenda. Last week Marconi snapped up Bosch’s public networks division for £95m. Simpson said the deal would be paid for in cash using existing bank facilities.

The Bosch deal gives the group’s communications division improved access to Germany, the third largest telecoms market in the world, Simpson added.