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Technology Stocks : Bookham Technology -- Ignore unavailable to you. Want to Upgrade?

To: tech101 who wrote (250)	2/5/2003 1:50:46 AM
From: semi_infinite	Read Replies (1) \| Respond to of 376

Bookham hopes to break even this year By Ben Hunt, IT Correspondent FT.com, 19:15 GMT Feb 4, 2003 Bookham Technology on Tuesday said it hoped to break even by the end of 2003 after making rapid progress in cutting its cost base after the October acquisition of Nortel Networks Optical Components. The group, which makes optical components for telecommunications networks, has emerged as a consolidator in the depressed sector as its acquisition of Marconi Optical Components in December 2001 was followed by a £71m ($117m) deal for NNOC. The acquisitions lifted sales in the year to December 2002 to £34.6m from £21.9m in 2001 but increased the group's cash burn rate as it sought to integrate the companies. Giorgio Anania, chief executive, said the integration of NNOC was all but complete and the group had identified a further £15m of cost reductions in the final quarter. These led to a total reduction in its cost base of £115m during the year - equivalent to a 47 per cent fall. Mr Anania said Bookham believed it could break even on sales of £45m a quarter, rather than the £52m previously signalled, and that an upturn in sales in the second half could lift the group. "There is continuing growth in traffic that will help to mop up a lot of the overcapacity of carriers while our customers such as Marconi, Nortel and Lucent are getting into much better financial shape," he said. Bookham said it expected to record first-quarter sales of between £20m and £23m, against £14.3m in the fourth quarter, with a maximum first-quarter cash burn rate of £21m, down from £31.3m in the last quarter. It finished the year with £105.4m in cash. In the 12 months to December 31, Bookham recorded a pre-tax loss of £101.4m, including exceptional charges of £36.7m related to inventory write-downs and plant closures, compared with losses of £113m in 2001. Losses per share were 67p (88p). The shares closed up 1/2p at 77-1/2p. Comment The acquisitions of NNOC and MOC have transformed Bookham from a start-up with interesting technology to a first-rank optical components maker with an opportunity to win a large share of a lucrative, but fragile market. It has proved itself able to integrate the two businesses and cut costs rapidly. But the cash cushion that has been a comfort to investors has shrunk and the last part of the break-even equation - an increase in sales activity - is largely beyond the group's control. If Bookham does succeed, then the potential rewards to shareholders could be huge. But in such an uncertain world - in telecoms and beyond - prospective investors may feel that this is the time for looking rather than leaping.