News blog
Datong
- BY: Andrew Hore |
- POSTED: 05/06/2012 |
Surveillance equipment supplier Datong believes that it will have a stronger second half after a poor start to the financial year.
Revenues declined from £6.33m to £3.84m in the six months to March 2012, but house broker Canaccord Genuity forecasts full year revenues of £12.8m, up from £11.7m last year. Budget delays in the US and the deferral of a £900,000 UK order led to the skewing of revenues to later in the financial year.
The order book was worth £2.4m at the end of March 2012 and in April and May the additional order intake was £3.1m.
The cost base has been reduced by £500,000 a year but not all of that has shown through yet. Datong reported a £142,000 pre-tax loss but that was after a £300,000 non-cash write-back relating to a successful defence against patent litigation.
At 28.5p a share, Datong is valued at £3.94m. Lower revenues also lead to lower working capital requirements. Net cash increased from £1.3m to £2.1m over the interim period. Datong continues to invest in product development.
Mark Cook took on the role of chief executive earlier this year. He intends to improve production efficiencies and move into additional markets. He is also looking into providing services which could generate steadier revenues.
Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFMay2012_32.pdf
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