Fall in third party products to see small loss for Datong

SPY gadgets firm Datong said sales of its own products have performed well over the past year, but third party products sales have slumped after customers failed to place orders.

As a result, Datong expects full year revenues to be around £11.7m, down from £14.1m last year, and the group will report a “small loss” for the year.

The Leeds-based group, which makes technology used to track criminals and terrorists, reported strong sales of its own products to its core US market and said it had also seen good sales to other parts of the world.

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The group’s own products saw revenue growth of around 23 per cent in the year to September 30.

Datong’s third party products business is expected to show a significant reduction on last year in all territories after a number of customers put in orders last year and consequently haven’t placed them this year.

The group has net cash of around £1.3m.

In July, Datong announced that chief executive Dean Blood was leaving immediately, without giving a reason for his departure.

Brian Smith, Datong’s former CEO, has returned as temporary chief executive while the company searches for a permanent replacement.

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Yesterday the group said “good progress” is being made on the appointment of a new chief executive and a further announcement is expected later this month.

Datong said it is confident of future profitable growth thanks to its position in the international intelligence gathering market and its investment in new product development and new routes to market.

The company has been trying to diversify beyond its traditional markets of the UK, western Europe and the US to boost revenues. It is targeting areas such as Mexico, India and Eastern Europe, where the battle against drug cartels, terrorism and organised crime is fuelling demand for covert surveillance technology.

The group is upgrading its portfolio of products to meet the increasingly sophisticated demands of customers.

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It has launched a new generation of products, which have more power, plus 3G capability to allow rea l-time tracking over the internet.

These products are designed for hours of continuous use in hostile environments, and allow users to track suspects remotely using satellite location.

Earlier this year it also signed a new third-party deal, which allows it to offer remote video surveillance.

This has triggering so users do not have to watch hours of video back. It is also high definition, high resolution and low bandwidth.

Datong listed on the AIM market in London in October 2005 and is included in the FTSE Electronic Equipment sector.

Group revenues for the year to September 2010 increased 80 per cent to £14.06m.

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