LONDON (Alliance News) - Elektron Technology PLC said Thursday that, whilst its revenues for the half year to end-July are expected to be behind the same period a year before, its recent GBP3.3 million fundraising will help it to focus on improving its trading performance.
In a statement ahead of the company's annual general meeting, Elektron said half-year revenue will be lower due to its decision to rationalise its low-margin products that are sold to the UK's National Health Service.
Elektron said some of its customers for its Connectivity segment have been de-stocking. The company noted that sales from its new products are increasingly offsetting the decline in its legacy portfolio. It expects sales from these new products to be ahead of the previous year.
Its trading performance has improved due to some price increases, as well as a reduction in selling, general and administrative costs that it implemented in the second half of the previous year. Elektron expects to post an exceptional charge of around GBP800,000 to cover the recent fund raising and renegotiation of its bank facilities in the first half.
The company said its net debt as at July 31 is expected to be lower than GBP5 million, from GBP8.0 million at the end of January.
The new funding will not only help it focus on improving its trading performance, but also will be invested in new products and optimising returns from its existing products, it said.
"This will create the conditions for organic growth which has eluded the business for several years," said Chairman Keith Daley in the statement.
Elektron Technology will announce its half-year results on September 11.
Shares in Elektron Technology were trading up 4.8% at 5.50 pence Thursday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
Copyright 2014 Alliance News Limited. All Rights Reserved.