11 February 2014

Elektron Technology plc

Year end trading update

Elektron Technology plc (AIM: EKT, "Elektron" or the "Group"), the global technology group, provides an update on performance for the full year to 31 January 2014.

Performance

As announced in the third quarter trading statement issued on 17 December 2013, following a very challenging period as a result of factory relocations, operations have stabilised and, as expected, the sales backlog has reduced to normal levels by year end. Elektron has implemented selective price increases and a reduction in operating expenses.  In the second half of the year sales from Continuing Operations were £24m (unaudited) (2013:£23m) and underlying trading performance has shown a welcome improvement.

Sales from Continuing Operations for the full year were in the region of £46m (unaudited) (2013:£49m).

Whilst substantial progress has been made in reshaping the business in the second half of the year, as previously announced the financial performance for the full year is disappointing. The disruption to production output principally in Tunisia, the cost of restructuring and other exceptional costs, less disposal proceeds, have resulted in an increase in net debt to £8.2m (unaudited) as at 31 January 2014 (31 January 2013: £5.0m, 31 July 2013: £5.8m (unaudited)). This compares to an average net debt level for the year of £7.9m. As well as invoice discount facility which provides working capital, the Group continues to meet its debt repayment obligations under the committed revolving credit facility which is due for renewal in April 2016.  Against a background of the Group's lender remaining supportive, the Board is in discussions to vary certain conditions of this facility to reflect the recent trading of the business.

New products

Investment in new product development during the year was in the region of £1.9m (2013: £1.4m).  The Group believes that this level of investment has to be maintained if it is to generate revenue growth from both new innovation and extensions to existing product ranges.

New products introduced during the year included:

·      Checkit, a smart, wireless food safety monitoring system, launched in Feb13. The Group is continuing to develop platform technology focussed on a system of smart sensors, wireless communications and networked computing and cloud based applications, with further launches in this range planned during 2014

·      A new generation of differentiated, high performance Queensgate nanopositioning products,   the first of which is a patented 'Dual Sensor Control Technology' allowing throughputs three times faster than industry standard.  Sales commenced in December 2013.

·      Expansion/ replacements for the Ophthalmic range of products including an upgraded Henson perimeter range to be launched in March 2014

·      Product extensions to the Bulgin 6000 series power and data connectors, launched in 2012. The Bulgin 7000 series, a new range of hermetically sealed power connectors for harsh environments, launched in August 2013.

Brand rationalisation

Elektron continued to rationalise its brands and product ranges, resulting in disposal proceeds in excess of £2m being generated from the non-core activities of Total Carbide, Tinsley Traditional and SIFAM.

The Group has recently reorganised its Instrumentation Monitoring and Control division to create three smaller business units, with discrete management teams, focussed on delivering improvement to sales and profitability.

A comprehensive statement on the Group's prospects will be provided in the full year results for the year ended 31 January 2014.

Enquiries:

Notes to Editors

Elektron conceives, designs and markets innovative engineered products and services for businesses at its technology hub in Cambridge. It has a multi skilled team of engineers and product line specialists focused on the opportunities created by disruptive global trends in the following areas:

·      New waves of "aware" business applications:  Internet of Things

·      Demand for ubiquitous power and data: Connectivity Solutions

·      Growth in high precision manufacture: Nanopositioning

·      Healthcare for the ageing population: Ophthalmology

·      Connected customer experiences and service delivery: Ecommerce and EService

·     

In addition it owns a portfolio of well-established products and brands which provide customer access and feedback.