10th Sep 2015 08:12
LONDON (Alliance News) - Elektron Technology PLC turned to profit in the first half of 2015 as the group cut its cost of sales in the half, though revenue was broadly flat, thanks primarily to sales falling in its declining markets, and said the launch of its Internet of Things product is on track.
Elektron, which makes connection, monitoring and control products, said its pretax profit for the six months to the end of July was GBP300,000, compared to a GBP600,000 loss it made a year earlier. This was primarily due to an improvement in its gross margin, as it managed to reduce its cost of sales through operational improvements.
Revenue was broadly flat in the half at GBP22.0 million, compared to GBP22.1 million a year earlier, mostly due to revenue falling 20% in its declining markets. Elektron splits its markets into three categories - high growth, static or lower growth, and declining. Sales in its static or lower growth markets were up 4.6%, while high-growth sales, which make up a small proportion of its total revenue, rose 20%.
The group said the launch of Checkit, a food-safety monitoring system and its first Internet of Things-based product, is on track for the second half.
"The group continues to improve underlying profitability from its established businesses whilst investing in new products for high growth and very large markets. With a further reduction in debt and the imminent launch of the group's flagship product, I have every reason for optimism," said Elektron Chief Executive John Wilson.
In a separate statement Thursday, Elektron said Chief Financial Officer Andy Weatherstone is set to step down from the company in order to go back to running his turnaround consultancy. He will remain in the role until March 2016 and the company has started the search for his successor.
Elektron shares were up 3.1% on Thursday morning at 6.57 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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