GEC-MARCONI HAS impressed analysts with an unexpectedly strong rise in profits, and the GEC group claims that is has now resolved the contract-overrun problems which have dogged its defence-electronics arm over the past year.
The GEC unit ended the financial year to March with operating profits up at £291 million ($450 million), a rise of £86 million on 1994/5. Sales also grew strongly, to top £3 billion.
The improved operating performance was marred, however, by a provision of £48 million to cover "a contractual dispute". GEC does not identify which programmes are involved, but difficulties on projects such as the Phoenix reconnaissance drone and the Eurofighter EF2000 radar are among likely candidates.
GEC says that "-solutions have now been found for the technical problems, and progress has been made with the associated commercial agreements". The group does not anticipate any further charges.
Acquisitions, led by naval shipbuilder VSEL, contributed $383 million to sales and £60 million to profits. VSEL also helped to take the GEC-Marconi order book up by 24%, to £6.2 billion.
GEC also pleased financial markets by announcing that George Simpson would leave his present post as chief executive at Lucas Industries to take over as group managing director in early September.
Simpson is shepherding Lucas into a merger with US automotive-parts manufacturer Varity, raising speculation that the Lucas Aerospace business may eventually be put up for sale.
Source: Flight International
