City File: Shrinking to grow

THE market will soon realise Electron House profits are expected to double over the next two years to pounds 2.7m. Shares in the small electronic components distributor are also likely to offer a much improved yield of 10 per cent next year and 10.9 per cent in 1994. Electron is selling its computer wholesaling operation for pounds 5m - more than pounds 1m above its net asset value. The purchasers are also assuming some pounds 4m of debt, so the total proceeds will reduce group borrowings by pounds 9m and gearing from 110 to 25 per cent. While the disposal halves the group's turnover, Electron will no longer be vulnerable to the volatile and low-margin computer market. Instead it will concentrate on component distribution and expansion into Europe.