Trading Update
August 07 2007 - 11:30AM
UK Regulatory
RNS Number:6742B
Densitron Technologies PLC
07 August 2007
Densitron Trading update
2007 sees the Company as a lean and focused organization.
The planned disposals of the loss making businesses, Gaming and Public
Information Displays, have enabled the Company to concentrate on its core
business of Display Solutions and investments in the land at Blackheath and the
shares in VBest Electronics Co. Limited.
It is expected that the results for the 6 months to 30 June 2007 will be in line
with the Company's internal budgets and will show orders of #8.7m representing
an increase of 39% on the second half of 2006 and 3% on the first half of 2006.
Sales are expected to be #7.0m representing a decrease of 6% on the second half
of 2006 and 11% on the first half of 2006. A significant part of this decrease
can be attributed to the weakness of the US dollar against the pound which has
shown a depreciation of over 10% on the comparable period in 2006.
The order book has grown in the 6 months to 30 June 2007 by #1.6m to
approximately #6.7m, an increase of 31% over December 2006 and the major
products pipeline continues to grow.
The outlook for the Display Solutions business is positive as a result of the
groundwork done in the first half of the year. We have started to expand our
global distributor net work and are pleased to have added Sweden and Spain. In
parallel we have forged relationships with new suppliers including a plastics
factory to give access to complete products. Our focus remains to achieve good
margins for the knowledge that we contribute to projects that we run for our
customers. We are very pleased to report that we continue to attract new talent.
Having succeeded in the legal action against the Old Addeyans Football Club to
take possession of the land at Blackheath the Company has continued its
negotiations with the Local Authority over the terms of the proposed land swap.
We have had one offer for some of the Land and are currently in negotiations on
this. Shareholders will be advised when there are further developments.
VBest Electronics Co. Limited remains a significant investment to the Group and
as such considerable Board attention is given to its management. Densitron has 2
seats on the VBest Board. Grahame Falconer and Vincent Linn represent Densitron
on the VBest board. During the first 6 months of the year Grahame Falconer and
Tim Pearson and other senior members of staff have visited both VBest
Headquarters in Taipei and also the main LCD and LCM factory in China.
VBest has shown considerable sales growth in the first 6 months of 2007 which
has required the recruitment of some 300 additional production staff (around a
40% increase) in the Kunshan factory in China. Inadequate training and
supervision has led to a deterioration in production yields which has resulted
in the Company making a loss. Corrective measures have been put in place and the
VBest Board is confident that the second half of 2007 will show an improvement.
At the July Board Meeting the VBest Board approved changing the Company's name
to Evervision Limited.
I reported in my statement in the Annual Report that the Company will look to
grow its Display Solutions Division by organic growth and strategic acquisition.
I can report that a number of companies have been identified as potential
acquisition targets but the prices sought are unrealistic. The Board remains
committed to this strategy but will only proceed if it deems that an acquisition
is appropriate in both terms of activity and price.
Your Board of Directors continues to believe that the market capitalisation of
the company does not reflect the underlying asset value of the business. The
Board will continue to take the necessary steps to improve the return from both
the operating activities and investments so that asset values are recognised.
For further details please contact:
Tim Pearson, Group Finance Director
Densitron Technologies plc Tel: 0207 648 4200
John Wakefield, Director
Blue Oar Securities Plc Tel: 0117 933 0020
This information is provided by RNS
The company news service from the London Stock Exchange
END
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