Chip off the old block

The technology boom may be a long and distant memory for even the most rose-tinted of venture capitalists, but one British-based technology company still continues to impress the City with its steady performance.

Up until last week, that is. Cambridge-based Bluetooth chip manufacturer, CSR, suffered a 57p fall in its share price to 333p last Wednesday after warning of a first quarter slump in sales. This was despite the group reporting a threefold increase in full-year sales.

The share price rallied the following day, and closed at 352p as Accountancy Age went to press, but finance director Paul Goodridge will be intent on improving that further.

But it seems that even the darkest clouds can have a silver lining for Goodridge, as he tells Accountancy Age: ‘Last year we drove through such a scale of sales that now we are going to have to tow the line with seasonal change. I am very confident about the rest of the year.’

For Goodridge at least, the post-Christmas slump is proof of a maturing company and market.

Goodridge joined CSR (Cambridge Silicon Radio) in 2000 and was appointed finance director in January 2002. He was previously head of UK finance at PA consulting. Through the nineties he held down a number of financial positions at Black & Decker.

Sales for the first quarter of 2005 to 31 March, according to CSR, would be between $60m and $70m (£39m), compared to $79.8m for fourth quarter 2004. It seems that the Christmas sales trend is now a real part of CSR’s business life.

Of course, getting used to a maturing business is not all Goodridge has to contend with on a daily basis. International financial reporting standards are another issue that he has been spending a significant amount of his time on.

He says that the transition to IFRS has not caused the group too much of a headache, ‘apart from going through a project to see how it impacts us’.

‘IFRS2 will impact us most, or share-based payments, and even then it will have less than a 5% impact on earnings,’ says Goodridge. ‘Being a technology company, share options have always been an accepted way to remunerate all levels of staff.’

His hope of a pickup later in 2005 could well be justified, as CSR will benefit from a number of design contract wins and the take up of Bluetooth-based products is expected by analysts to increase throughout 2005.

The explosion in mobile technology for both telecommunications and computing means that the future should be bright for Goodridge. CSR has a hugely impressive client list, with the likes of Nokia, Samsung, Motorola, Apple, Dell and IBM using its technology in one form or another.

Describing itself as ‘the single-chip wireless company,’ the next 12 to 18-months could prove extremely important for CSR. With Bluetooth technology beginning to really take off, and wireless having matured, the company finds itself in an excellent position. Goodridge, together with chief executive John Hodgson, must take advantage and perhaps expand the business still further.

It seems feasible that this time next year, Goodridge will be announcing profits above and beyond those of last week which still came in at an impressive $59.3m.

Related reading