A lighter side of TelemetrixCEO of Telemetrix Tim Curtis enjoys being at the helm of a successful UK group, and his light touch management skills seem to work. Alex Mayhew-Smith spoke to him
There is something encouraging about meeting a British company that has kept itself out of the way of the long-legged axe man of recession stalking the land, divesting firms of their employees.
One such firm which has done so but has remained somewhat low profile is Telemetrix. In the past any successes of the firm have been overshadowed by the massive loss making effect of the group’s US magnetic components subsidiary GTI.
For two years GTI made a profit but it was not sustainable, says Tim Curtis, CEO of Telemetrix, and for the last four years the division has made a loss. To make matters worse, although GTI was a subsidiary of Telemetrix, it was not directly managed by the parent company.
Fun house… Products from Zetex are doing it for parent company Telemetrix and its CEO Tim Curtis (above).
Curtis says with a smile that apart from the thorn of GTI, he has enjoyed being at Telemetrix. And no wonder; the company’s Zetex and Trend businesses are doing well. Last year was the sixth successive year of sales growth for the two UKdivisions, operating margins have grown from 7 to 11 per cent in that period and earnings per share has trebled in five years.
That is why the company remains so optimistic after announcing its recent 1998 results. The group posted a pre-tax loss of ?7.1m but in a sum that transforms the business like honey to a starving bear, take away GTI’s loss of ?14.9m, and you get a pre-tax profit for continuing businesses of ?7.8m.
With a thousand employees worldwide and a group turnover (excluding GTI) of ?68.7m, Telemetrix is a medium sized company and is likely to stay that way. Its size lends the firm a measure of security: “We position ourselves not to go head to head with larger US firms, it is unlikely we would win,” says Curtis who then briefly considers being in a firm like Symbian, which seems to be setting itself up for a struggle with Microsoft.
“It is a fascinating space. If Symbian keep it together it could work for them,” he muses.
The market has been bumbling along for a while now, says Curtis and it unlikely to get any worse. Despite this, the specialist semiconductor division Zetex is meeting its own operating margin target of 15 per cent. The long term objective is to drive up the margin.
And if all these fine numbers aren’t enough to convince that this is one UK electronics firm that can stand alone, Zetex’s recently purchased site in Lansdowne Road, Greater Manchester, will begin production of advanced bipolar products and MOS-based manufactured discrete and IC devices before the end of the year. Zetex’s new site, acquired from GEC-owned Seal Semiconductors in July 1998, will break even in 1999, says Curtis. TELEMATRIX 1998 RESULTS Group
business (?m) Sales
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“We purchased it for the technical capabilities it gives us. It suited our product plans. Before our linear wafers were made elsewhere, now we can produce them in-house,” says Curtis.
The firm also recently announced it was purchasing all 4in. and 6in. wafer production equipment from the closed Seagate site in Livingston, Scotland. The equipment will be used to increase Zetex’s manufacturing capacity. Colin Greene, group executive at Zetex, said:”The Zetex business has grown fourfold since the company’s launch ten years ago and we are looking forward to even more rapid growth in the decade to come.”
So far the company’s growth has been pushed along by Zetex’s linear devices, with 50 per cent growth in the last year. Zetex’s sales to the Pacific Rim countries, particularly Japan, has also pushed the growth of the company. “Korea is also important to us, the customer base is not as wide as it is in Japan but we have a few customers there,” says Curtis.
In fact the only area in which the firm has seen sales below expectations has been in the telecoms test subsidiary Trend, which markets its products under the Aurora brand. Sales were flat in 1998, says Curtis but it is a changing market. New carriers which have popped up in the last year are beginning to make an impact. Firms such as Colt, Energis and Concert have helped to keep Trend’s sales, if not growing, at a steady level.
“We accelerated our development programme for products beyond ISDN, moving into frame relay and ATM. Trend is not capital intensive, the barrier is the development teams. We are setting a skill base of people and design methodology,” explains Curtis.
Trained at Harvard Business School, Curtis has learned to run things with what he calls a “light touch”. His first job in the electronics sector was with Unitech, where Curtis refined his management style. A combination of share options to motivate staff and a style of leaving managers autonomous but with a guiding hand seems to pay off.
At 56, Curtis seems likely to stay with Telemetrix for a while yet. “Apart from GTI it has been great fun to be involved with a UK manufacturer, producing products and building an employment base.” One can expect more fun from this British firm.