PDL interim profit steady

For the six months to the end of September PDL made $3.187 million, up 5% on last year's interim result, and group sales totalled $186.2 million compared with $178.6 million in 1999. An interim dividend of 10 cents per share has been declared.

Sales growth came both from the New Zealand market and offshore activities, and the company says the result reflects increased pressure on margins associated with rising component costs due to the lower dollar, as well as increasing competition in commodity product areas.

It is precisely those commodity areas that the company is trying to move away from, as it focuses on the development of innovative high-tech, high-value products rather than its previous role as a mass manufacturer.

"Over time, many of the product areas that we have been manufacturing in New Zealand have become commodities and we are actively looking at opportunities to reduce our cost base in order to increase shareholder value," the company says.

However it adds that the change in focus takes time and costs money, and it will take a while to get the business in the right position.

Part of the strategy has been divesting assets that don't fit its new core strategy, which includes the recent sale of its plastics business. The company says the proceeds from the sale have been used to further strengthen the company's balance sheet, as well as provide capital for the development of its core electrical and electronic businesses.

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