Marconi issued the following trading update for the three months ended 30 September 2004.
Sales from Continuing Operations £305 million – consistent with full year guidance
- Up 6 per cent on Q1 FY05
- In line with Q2 FY04 reported sales (£305 million)
- Up 4 per cent on Q2 FY04 at constant currency (£293 million)
Higher level of tender activity and customer trials
Modest increase in Q2 adjusted gross margin from Continuing Operations compared to previous quarter (Q1 FY05: 32.2 per cent) to approximately 33 per cent
Solid progress in H1 adjusted gross margin compared to the first half of the previous financial year (H1 FY04: 27.7 per cent
Restructuring debt now fully repaid; net cash £335 million at 30 September 2004
Outlook
- Full year sales guidance maintained; low single digit growth at constant currency
- Full year adjusted gross margin guidance maintained at 34 per cent from Continuing Operations; more challenging target in light of first half business mix
- Additional £10 million focused investment planned in R&D and Sales & Marketing to support future growth opportunities
- Customer endorsements of next generation portfolio reinforce confidence in medium-term prospects
The company noted an increased demand for access equipment, as well as an increase in customer tenders and trials, as operators plan for their next generation networks.http//www.marconi.com