Datong announces “solid” half-year results

The Leeds-based business, which is being acquired by Seven Technologies Holdings, said that it delivered revenue of £5.73m in the six months to March 31 2013, a year-on-year rise from £3.84m, while operating profits reached £16,000, compared to losses of £141,000 in the same period a year ago.

Pre-tax profits of £19,000 were achieved, after pre-tax losses of £142,000 the year previously.

Mark Cook, chief executive, said that throughout the period, and in line with its previously stated strategy, the group has continued to invest in its product portfolio and routes to market whilst also “prudently controlling its cost base”.

The company announced at the end of last year that a major UK contract win had been secured worth £7.5m over the next two years. Of that contract £1.26m has been recognised as revenue in the period.

Mr Cook said that despite a “strong performance” from the third party product business segment, further territory distribution rights have been terminated during the period reflecting the commercial growth of Datong’s supply partner and which will “significantly impact future financial performance”.

He also said that the sales order pipeline for the second half of the financial year and in particularly the expected timings of certain opportunities is being “adversely affected” by the continuing uncertainty surrounding the sequestration process in the US.

Following the announcement earlier this month by Seven that its offer to buy Datong was unconditional, the non-executive directors of the company, namely, Paul Lever, Grant Ashley, Richard Brearley and Brian Smith resigned from their offices with immediate effect.

The board therefore now comprises of Stephen Ayres and Mr Cook.

Seven intends to re-register Datong as a private company following the cancellation of its shares on July 10 at 7am.