Pre-tax profits increase by 68% at Gateshead technology company Zytronic

Blaydon-based touch sensor company enjoys sales increases in all its key sectors as it maintains its focus on exports

Mark Cambridge, chief executive of Zytronic Plc
Mark Cambridge, chief executive of Zytronic Plc

Rising demand for its range of sensor products has helped Gateshead firm Zytronic boost pre-tax profits by 68%.

Preliminary results for the year ended September 30, 2014, show the company achieved profit before tax of £3.3m, compared to £1.9m in 2013.

Group revenue, meanwhile, rose 9%, going from £17.3m to £18.9m, while net cash balances at the business increased by £2.3m to hit £7.8m.

Originating from a group of companies established in the 1970s, Zytronic in its current form began life through an IPO in June 2000.

Operating from three buildings in Blaydon, the firm, which employs around 170 people, develops and manufactures products based on so-called projected capacitive technology (PCT) or mutual projected capacitive technology (MPCT), which offer significant durability, environmental stability and optical enhancement benefits.

According to a report accompanying the latest results, the significant improvement in performance arose principally from a resumption in revenue growth, driven by a demand for the touch products, which accounted for 79% of sales.

The results also benefitted from initiatives to improve efficiencies and cost control, which resulted in a significantly higher gross margin of 36.6%, compared to 28.4% last year.

Sales increased across all the company’s main sectors of financials, vending, industrial, signage and gaming.

In the latter two areas in particular, Zytronic was aided by its ability to manufacture and supply ultra-large sensors and multi-touch options.

Chief executive Mark Cambridge said: “We feel positively going forward in terms of the spread of opportunities, the stretching of those opportunities and the diversity of what we have been producing.

“A long time ago we recognised what we had, what we needed to do and how we could make the whole thing work.

“We developed an export focus and, in the North East, we are now probably one of the leading lights in understanding and dealing with export markets.”

In total, Zytronic has 37 global channel partner agreements in place, providing active coverage across 60 countries.

In the year to September 30, £17.6m - or 94% - of total invoiced revenues were export derived, compared to £15.8m, or 92%, in 2013.

In terms of exporting, the EMEA region remains the most significant for Zytronic, while the Americas, influenced by sales in the gaming market, have shown significant revenue growth.

Mr Cambridge said the firm would also be pursuing a marketing-driven push for more sales in the Middle East.

He added that there was currently “momentum” in the touch sensor business and, while the nature of the firm’s products meant long-term sales visibility was rare, Zytronic was building on a number of ongoing projects and was seeing reasonable levels of activity going forward.

Zytronic chairman Tudor Davies said: “Whilst we are only a couple of months into the new financial year, the sales and order book are ahead of last year and our focus is on continuing to increase value for shareholders now and into the future.”

The total dividend for the year increased by 10% to 10p per share.

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