Zytronic, a North East tech firm, is weighing its operational options in light of declining sales and ineffective recovery efforts.
- Despite measures to rebound post-pandemic, Zytronic’s sales dropped from £8.6m to £7.2m, triggering strategic reassessment.
- A sustained downturn, exacerbated by external adversities, sees Zytronic contemplating sale, downsizing, or ceasing operations.
- The firm is exploring various strategies, including potential delisting from AIM to cut costs.
- Efforts to revitalise through expanded tech and collaboration in design have yet to yield significant results.
Zytronic, a notable technology firm based in Gateshead, is reevaluating its operational strategy amidst ongoing financial challenges. The company, known for its expertise in touch-screen technology, has reported a further decline in sales. Efforts to return to pre-Covid business levels have proved unsuccessful, with recent figures indicating a revenue drop from £8.6 million to £7.2 million. This significant downturn has prompted the company to consider a broad spectrum of options, including a possible sale, business downsizing, or a total shutdown.
In an official trading update, Zytronic acknowledged the absence of short to medium-term recovery in sales volumes. Faced with this harsh reality, the firm is now in the process of conducting a thorough review of its business operations. Among the strategies being considered is the development of a new business plan aimed at increasing market share in vital sectors. Moreover, the prospect of dissolving the company’s assets in a solvent manner is on the table, indicating the severity of the situation.
The company, which has been publicly listed on the AIM stock market since 2000, is also exploring the possibility of delisting. This move is partly driven by the desire to decrease the financial burdens associated with being a publicly traded entity. In pursuing this course, Zytronic aims to focus its resources more efficiently as a private company.
Despite these challenges, Zytronic plans to concentrate on certain technological advancements and foster a collaborative sales and design strategy. By adjusting its manufacturing footprint, the company intends to respond to the sustained lack of recovery in its business performance since the pandemic onset. Board members have noted that existing efforts have not led to a significant turnaround, underscoring the need for a strategic catalyst to reverse the current trend.
In reflecting on past financial years, Zytronic revealed that its revenue has dwindled considerably from more than £20 million in 2019. A minor increase in turnover during 2022 failed to persist, with subsequent financial periods, including FY24, reflecting ongoing losses. According to past chairman Chris Potts, the business’s struggles are partially attributed to the enduring impact of international events, with the bankruptcy of a major customer further exacerbating the downturn.
Zytronic’s future remains uncertain as it navigates substantial operational and financial challenges, seeking sustainable solutions.
