LONDON (Alliance News) - Elektron Technology PLC on Tuesday said it is "intensifying" measures to cut costs because it expects continued weak demand and lower sales for the remaining brands that still account for a majority of its sales in the fourth quarter.
Those brands are in low growth or declining markets, the technology company said.
Overall, third-quarter trading has continued a pattern of the first half of the financial year, Elektron said, with sales of products from brands in which the group continues to invest through new product development growing over the prior year period.
Bulgin is showing modest growth while Queensgate and Ophthalmic are in aggregate showing around 50% growth against prior year and now represent around 7.0% of group sales, the company said.
Elektron said it expects its full-year trading performance to be ahead of the prior year for existing businesses, excluding Checkit which is "effectively a start-up" and is accounted for separately. The company cited "higher margin sales" of products from invested brands, coupled with "operational and overhead improvements" implemented during the last 18 months.
Net debt was about GBP1.5 million at the end of October, from GBP2.1 million at the end of July and GBP2.7 million at the end of January, although the company thinks that debt could increase slightly in the final quarter due to "working capital movements".
"Although we are somewhat cautious about the trading outlook given current market conditions, performance has so far held up well. We were greatly encouraged by the market reaction to the new Checkit Work Management system at its launch a few weeks ago. The task now is to convert the strong interest into orders. We expect to announce further new product launches shortly," Chief Executive John Wilson said in a statement.
The company's financial year ends on January 31.
Shares in Elektron were down 1.7% at 6.51 pence on Tuesday late morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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