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Datong playing vital role in war on crime
THE deepening battle against drug cartels and organised crime around the globe should fuel a growing pipeline of orders, spy gadgets firm Datong believes.
The Leeds company is plotting its recovery from a 1.52m loss in the year to the end of March, compared to profit of 1.85m a year earlier.
Revenues dipped almost 40 per cent to 6.51m.
Datong makes covert tracking devices used by law enforcement agencies and security forces, but has seen the global recession dent its earnings.
Although this spend is "relatively insulated" from the downturn, Datong said budgets, particularly in law enforcement, have been stretched.
It also felt the impact of the change of administration in the US, as the shift from Republicans to Democrats meant orders slowed while staff changed over.
Datong has also been tied up in legal wrangling over a patent on an unnamed product, and in March was dealt a surprise blow when the High Court ruled against it.
Datong was forced to put global sales of the product, which is used in mobile telecoms, on hold. Last month it resumed sales, except in the UK, and is appealing against the ruling.
"The business that we could not take was 1m and we were expecting to do more than that," said finance director Stephen Ayres. "Historically it has been relatively low (revenue) but there was a lot of growth potential and it's part of our core strategy going forward."
The company has cancelled its dividend to preserve cash.
Datong last week announced chief operating officer Dean Blood has taken the reins as chief executive. Former chief executive Brian Smith has moved to executive deputy chairman.
Datong has been focusing on growing markets, such as Mexico, India and Eastern Europe, over the past 18 months, and said it is starting to see the benefits of investment in these new sales channels.
In Mexico, a drug cartel known as La Familia this month killed 16 police in a series of brazen attacks, prompting the government to flood an area with 5,500 troops, elite police and navy officers.
Datong recently had a "significant order" for its tracking and location kit from the Mexican authorities, which is used on mobile phone calls.
"We've seen a pretty healthy impact from that," said Mr Smith. "We expect other South American countries to follow suit as a result of the problems with drug barons. It's a hotspot for us."
Datong last year strengthened its American operations by appointing a former FBI chief Louis Quijas as the president of its US subsidiary.
First quarter orders showed signs of this investment paying off, rising to 2.6m, a record sum. Datong said it is approaching 2010 with "cautious optimism".
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