Sales at Marconi slip and amplify losses |
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Published
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Wed, 03 Aug 2005 13:40
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A dive in the first-quarterly sales saw losses widening and margins contracting further at Marconi, the maker of telecoms equipment.
In the quarter ending June 30, Marconi had increased losses of about £36m against £11m in the previous year, along with earnings plummeting £4m to £285m. Nevertheless, the firm did not alter its full year expectations, maintaining that its annual results would conform to last year’s figures.
Following the loss of an important BT contract worth £10bn in May, Marconi had announced a job slash of 800 jobs, chiefly at its Liverpool and Coventry centres. The company had suffered a rude shock when it was disclosed that it was not amongst the eight companies that were listed for BT’s £10bn network upgrade plan. This could lead to the company having to bear a loss of about £50m.
Marconi revealed that discussions were on with labour unions and concerned staff councils and initial job cuts could be affected in the month of September. In addition, its cost-cutting schemes would carry on throughout the entire company in an attempt to gather reserves and help the company spring back to life.
In spite of this, the telecoms equipment maker put up an optimistic front and declared that it still had its hands full as far as business orders were concerned. It said that clients like Cable & Wireless and Vodafone had booked them for next generation products.
Meanwhile, business with BT continues to be robust, with sales to BT comprising of a sizeable 27% of Marconi’s total sales. The earlier quarter reported secure sales to BT at £77m.
Morning trading saw Marconi shares plunging half a point to 272p.
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