Eleksen shares have taken a beating after the touch sensitive fabrics developer said that 2007 revenues will be well below expectations and it needs more cash.
First half revenues will be between £550,000 and £600,000 and the final figures will be published on 21 September. House broker Panmure Gordon was not expecting profits in 2007 or 2008 even based on the old forecasts. Adoption of the technology is taking longer than expected but this can’t be a total surprise because new technology can take time to gain acceptance.
Eleksen raised £4m from a convertible earlier this year but it says it will need even more cash to achieve longer term goals. The 7.5% convertible loan notes are repayable in 2009. The conversion price is 40p a share which seems a long way off.
Finance director Ted Bechman is leaving the company in September.
Management has high hopes for the Eleksen eSystem, which will allow wearers of the clothes it is fitted in to control a wider range of entertainment and communications devices. It won’t generate significant revenues until next year.
News that City Sports, a US sports retailer, was stocking a line of iPod-enabled apparel using Eleksen’s ElekTex technology didn’t seem to help the shares. By the middle of the afternoon the shares were 8p lower at 12p.
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