A 'credible' performance for e2v in tough year

Reporting its results for the year ended 31 March, the one-time Marconi subsidiary's chief executive Keith Attwood (pictured) said lower worldwide demand over the last 18 months required e2v to take decisive action. "The first step was completing the refinancing of the balance sheet in December 2009, with positive support from shareholders," he said. "Along with delivering a creditable trading performance last year, in very difficult circumstances, we reduced our run rate cost base by 14%, on an annualised basis, and completed the consultation stages of our 2010/11 restructuring programme in Grenoble and Lincoln, to timetable and within the planned financial envelope anticipated at the time of the equity raise. "We have started this year with a stronger underlying order profile than last year, supporting our view that our markets have largely stabilised. Looking forward, we expect cash flow to be broadly neutral during 2010/11, as we implement the major phase of the restructuring programme. This provides us with a sound platform from which to implement our strategy for growth and we will be providing an update on this strategy during July." e2v recorded sales of £201.2 million for the year, a fall of 14% on last times' £233.2 million. However, pre-tax loss dropped to -£9.7 million (-£28.4m) although the company said that, given the level of reorganisation taking place in the business and exceptional charges, the adjusted operating profit of £15 million (£27.4m) more accurately reflected the comparable performance of the underlying business. The accelerated business improvement programme in the UK includes the transfer of manufacturing operations from e2v's Lincoln site to its main Chelmsford facility, along with the establishment of an engineering centre in Lincoln – where it sold its old site and acquired a smaller building. In France, this included the closure of the company's CCD wafer fab in Grenoble and significant resizing affecting other activities on the site. Further restructuring actions, mainly related to the UK and initiated in 2008/09, were also implemented during the year. Looking ahead, e2v said it had increased orders for the coming 12 months, leading it to believe that markets had largely stabilised and its costs would reduce further with the phased implementation of restructuring plans. It concluded that 2010/11 would be a year of transition.