29/05/2003

Marconi remains under intense pressure

Marconi’s latest financial figures have revealed a picture of declining sales for the troubled telecommunications technology company.

The firm, which has recently undergone a radical and highly complex restructuring programme, continues to face what was described as a “very tough” set of market conditions.

Marconi expect sales in its first financial quarter, April to June this year, to be under £400 million, down on the company’s last financial quarter performance of £426 million.

As a result the company, which employs 5,000 workers in the UK, announced that it would be further reducing its total worldwide workforce to 13,000.

Reporting a pre-tax loss of £599 million in the year up to March 2003, Marconi’s losses were down from £674 million in the previous accounting year. However, sales fell by 32% to £1.87 billion, down from £2.78 million on the previous financial year, a performance that Marconi attributed to “the result of significantly lower levels of capital expenditure by public network operators worldwide”.

Though the company reported that a cost cutting programme meant that the sales target from the next financial year had been reduced from £1.7 billion to £1.5 billion for the company to reach break-even point.

Commenting on the past year, John Devaney, Chairman of Marconi Corporation, said: "The successful completion of the financial restructuring was a watershed for the business. It enables us to look forward with greater optimism than at any time since the downturn in our markets started two years ago."

Mike Parton, Marconi’s Chief Executive, said the company had continued to make “operational progress quarter on quarter” in core business.

He said that this had been achieved during the final quarter as a result of improving margins and falling costs: “This is a tangible demonstration that the actions we are taking to return the business to operational health are working. Our markets remain very tough and we will continue to take the actions necessary to build on this improved operational performance."

The company predicted that the current tough marking conditions looked set to continue.

The restructured Marconi saw its shares re-introduced to the London Stock Exchange earlier in May.

The complex restructuring plan reduced the company’s external debt by £808 million to £3.9 billion.

(SP)

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