Investors are bracing themselves for more bad news when Marconi releases its interim financial results tomorrow.

City analysts expect the company's depressing financial performance to continue. A pre-tax loss of £898 million is predicted, compared with a previous profit of £276 million.

In its last financial statements issued a few weeks ago Marconi painted a slightly brighter picture with positive cash flow and the sale of its Medical Systems business to Philips.

However, analysts still believe its plan to cut net debt to around £2.7 billion by March next year is overoptimistic and likely to be unachievable.

They are also now predicting that the company will suffer from increased competition from other telecommunications companies through cutting back on its R & D programme.

Brokers Williams de Broe, have stated:

"Even if the company is successful in cutting net debt to around £3 billion by end-March, it will still leave Marconi in a very vulnerable position.

"In all probability, the shares are worthless, but this will not become apparent for some time."

As part of its programme of debt reduction Marconi has agreed a deal to sell 12 unneeded properties in the UK for £66.8 million.

This sale has brought the company's debt level down to around £3.5 billion. Its target is to reduce the debt burden down to between £2.7 billion and £3.2 billion by the end of March 2002.

In a separate deal, St Modwen Properties, a regeneration-based property company, announced that it had paid £33 million through its 50 per cent owned subsidiary, to buy six industrial estates, three office properties and two sports grounds from Marconi.

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