In an effort to salvage the position, Michael Frye, a member of the family that originally controlled Elliott, was brought in as chief executive. He continued to diversify but was let down on a financing package at the onset of recession and ended up presiding over a capital reconstruction.Unusually, Mr Frye's own head was not demanded as part of the price of reconstruction. He stayed in charge partly because of a feeling that the near collapse of the group was not his fault and because of his record in the 1980s, when he made a fortune for himself and fellow shareholders building up and selling the quoted Rotaflex lighting business. Banks and venture capital groups were also impressed by the management systems he has developed, which create a remarkable framework for improving corporate performance.After a long struggle, the rewards are starting to flow. The group is almost entirely out of machine tools with the lions's share of sales and profits coming from specialist and electrical engineering. Last year saw a near pounds 6m turnaround from losses to profits of pounds 2.8m. Mr Frye says he is pleased with current-year trading, which suggests analyst's forecasts of pounds 3.9m could be beaten.

Next year pounds 5m is projected to drop the p/e to just over 10, which looks undemanding.Another company being reinvigorated by a new management team is Bridport Gundry, at 93p. Established in 1665, the group makes nets and was caught up in the rapid decline of the fishing industry. Under David Sebire, the recently appointed chairman, and Geoffrey Woods, a chief executive with a big company background, the company is being given a new direction. Previous managements had tried unsuccessfully to diversify but at least left the new team with an improved balance sheet with debts cut from pounds 10m to pounds 3m.The new team has sold all the fishing-related interests and is applying modern management techniques to improve the performance of the 11 operating companies in the group. Many of the businesses focus on alternative uses for nets - such as controlling air cargoes or for helicopters carrying loads.