That rosy scenario was pushed back indefinitely yesterday when Racal unveiled a re-organisation of the telecoms operation designed to

That rosy scenario was pushed back indefinitely yesterday when Racal unveiled a re-organisation of the telecoms operation designed to bolster its disappointing growth rate.Yet rather than poaching an outsider with up-to-the-minute commercial experience in the fast-moving telecoms market, Racal has stuck with Martin Lea, 41, who will remain deputy managing director of telecoms services. Mr Lea, a veteran Racal executive, moved into that post 14 months ago, after a stint heading the European arm of Racal's data operation.On the surface, the company recovered strongly in the year to March, bouncing back into the black with pre-tax profit of pounds 80.8m, compared with a pre-tax loss of pounds 205.2m a year earlier, when the group incurred a pounds 234m charge relating to a disposal. But that ostensible recovery hid plunging earnings in telecoms services and a flat performance in the industrial electronics business.Against the spiralling revenue and cash flow growth of competitors like Colt Telecom,Racal Telecoms' record is dismal. Full-year turnover grew a paltry 9.6 per cent to pounds 296.8m, while operating profit virtually halved to pounds 22.2m. This, remember, is for a business that should be capitalising from the rapid spread of the Internet.The finishing touches to Racal's revamp of its telecoms arm are the result of a review begun in December. The new structure throws up three operating divisions, each with independent management, and its own strategy for growth.Racal Telecom - the core operation - will attempt to branch out beyond its traditional government and railway company customer base into the high-growth market of providing telecoms services to companies.

This is largely the business Racal acquired from British Rail Telecom, whose network is strung along the rail network The second division is Racal Translink. It provides infrastructure services, customer information systems and project support to rail and transport companies such as Railtrack and London Underground.The third division is Racal Fieldforce, which provides field service support for the periodic repair and maintenance needs of the rail industry and other telecoms customers.Among investment analysts, there is clear respect for Sir Ernest - he, after all, successfully floated mobile phone giant Vodafone in 1991 and spun off security services firm Chubb in 1992 - though concern is mounting over whether telecoms services will justify the cash being spent on it. Last year, Racal invested pounds 70m in the division and is planning to spend an unspecified, but higher, amount this year.While City analysts support Racal's belated move to aggressively target the market for business telecoms service and, in particular, areas converging on the Internet, there is also a realisation that the group trails rivals such as Colt and MCI WorldCom.A particular fear is that Racal's better second-half growth rate came from selling low margin "dark" fibre optic capacity rather than from more value-added applications.The apparent lack of bids for the unit, given the deal volume in the telecoms sector, also worries. "The business has clearly been up for sale, and nobody's bought it," said ABN Amro analyst, Sandy Morris "Yet they just keep throwing money at it That's the scary thing.". THE EUROSCEPTICS were handed more ammunition for their cause yesterday when the European Central Bank (ECB) was forced to apologise after its decision on interest rates was posted on the bank's website five minutes early - because an employee's watch was wrong.

Wim Duisenberg, president of the ECB, said the decision to leave rates unchanged appeared on the site at 1.40pm, ahead of the scheduled time of 1.45pm. The dour Dutchman said: "The member of staff who put it on the website had his watch wrong. I apologise for that." The cock-up follows a similar publicity disaster two weeks ago when a council member is understood to have revealed a decision on rates to journalists ahead of the official announcement. But Mr Duisenberg insisted that the bank's image had not been damaged by what he described as a "mishap".BRADFORD & BINGLEY Building Society embarked on a pounds 5m rebranding exercise in February, just before its members voted to demutualise in favour of plc status.Some eagle-eyed critics have noticed that the rebranding, as well as ditching the famous logo with two bowler hats (below), involves having the words "building society" more prominently featured on its branch facades.Knowing the vote was coming up, wouldn't B&B be better off keeping the building society references a bit more, shall we say, disposable?Not at all, says a spokeswoman. "We will be a building society for at least the next 20 months, so it would be wrong to change the wording now."When the next rebranding - to plc status - takes place, the costs will be included in the demutualisation costs, which B&B expect to be a thumping pounds 50m.