Marconi faces crucial analysts meeting
Marconi's Steve Hare and Derek Bonham face a grilling from analysts next Thursday over troubled telecom equipment manufacturer's prospects for survival.
As they release the company’s annual results, finance director Hare and chairman Bonham will be providing updates on talks with creditors over its debt mountain.
Together with chief executive Mike Parton they have been fighting to save the company which released three profit warnings and announced thousands of job losses during 2001.
Marconi’s disastrous financial performance and accusations that it withheld price sensitive information contributed to the resignation of FD and deputy chief executive John Mayo last July.
Since then, Hare, Bonham and Parton have been cast in the role of focusing on turning around the company’s fortunes.
They have come up with a new business plan which – along with creditors’ reaction to it – the City will be the most interested in.
Since the row that blew up over the release of its profit warnings, the company has been conscientious in releasing details of its financial performance.
Therefore there are unlikely to be any major surprises in its annual results.
Its trading statement for its fourth quarter show an operating loss of £108m for core activities and a major reduction in its debts. Sales in core activities of £813m for the quarter contribute to a total for the year of £3.1bn, but total losses for the year are predicted to be as high as £800m.
Chief executive Parton commented: ‘We have generated over £360m of operating cashflow since September, demonstrating the whole company’s commitment to cash generation.’
Convincing creditors of the company’s future is not the only challenge faced by Marconi chiefs.
The company is under scrutiny from the Financial Services Authority over accusations that it withheld price sensitive information from investors last year. A report from the watchdog is expected next month.