SPY gadgets firm Datong said political instability in a number of its overseas markets hit sales of third-party products, forcing it to warn on trading, but added growing sales of its own technology mean a positive long-term outlook.
The Leeds-based company, which develops products to help track criminals and terrorists, said annual turnover fell 16.4 per cent to £11.75m in the year to the end of September.
A 65 per cent slide in sales of a third-party cellular tracking device – £2.3m from £6.6m a year earlier – was behind the turnover slump. Sales of its own products increased 26 per cent to £9.4m. The group reported pre-tax profits of £48,000, down from £482,000 a year earlier.
Datong added order intake since October has been “comparatively low”, meaning half-year results will miss expectations. Its shares slumped 4.5p to 20p, an 18 per cent fall. Datong also warned on profits in August.
“What we’re not seeing is the budgets really disappearing, or being spent on competing products or being completely cancelled,” said interim chief executive Brian Smith. “It’s just very cyclical. Some of the rest of world countries that this product is particularly relevant to are a bit more volatile in terms of their political base. On a couple of occasions we have seen a change of government or uprising.
“The important thing is our own products have met with a lot of success.”
Datong parted company with its chief executive Dean Blood in July, with Mr Smith, the company’s former CEO, returning in a temporary role.
Mr Smith said “the end is in sight” in the search for a replacement CEO.
Datong also revealed plans to trim annual costs by about £500,000, which will include redundancies. The company, which employs 90 staff, is cutting an unspecified number of its 30 development staff, having launched a suite of new products.