Datong warns of lower profits

The Leeds-based firm said extended order lead times from some of its customers in the rest of world territory (RoW) and a slow-down in its European business, which excludes the UK, meant that sales would fall short of management expectations.

However, it said RoW sales in the second half of the financial year are expected to be “significantly better” than in the first half and management believes that the sales pipeline for the RoW remains strong.

The firm said that in Europe, the broader economic conditions continue to impact its law enforcement customers and as a result sales are expected to be lower than last year, particularly in third party products where the short term requirements of a number of customers were fulfilled by projects last year and, as a result, further orders have not been placed this year.

Datong said it expects its own products business to continue to perform well in its core markets of the USA and UK, however as a result of the extended lead times in the RoW and a slow-down in Europe, it now believes revenues and profits will be materially lower than previously expected for the year to September 30.