Advertisement

AorTech sales drop in half yearly report

Polymer company AorTech posted a drop in sales in its half yearly report, primarily as a result of a lawsuit and development costs.

Polymer company AorTech posted a drop in sales in its half yearly report, primarily as a result of a lawsuit and development costs.

The medical supplies company achieved sales of $822,000 for the six months ended September, of which $724,000 was the sale of polymer to customers, compared to last year's revenue of $2.63m.

Advertisement - Article continues below

Last year's sales were boosted following a renegotiated licence deal with St Jude medical centre.

However, the deal went sour on October 9th, after AorTech served St Jude a lawsuit claiming breach of contract.

St Jude denied the allegations and subsequently filed papers in the US courts seeking a declaratory judgement saying they were not in breach. They were granted a temporary restraining order in November, preventing AorTech from terminating the contract at issue.

AorTech continued to supply materials to St Jude and the cash position was looking critical by the end of October. The company had to gain support from investors, including existing shareholders, to finance the company and the costs of the impending litigation.

The dispute was resolved on Monday, but neither party has admitted liability.

The costs of the lawsuit contributed to the company's lower revenues in the six month period.

The figure also reflected the total deduction of $1.51m incurred by the costs of polymer manufacture, development expenditure, amortisation of intangible assets and administration.

The company said it started the financial period with cash of $1.91m but losses and currency movements between the sterling and the dollar led to a closing cash balance of $295,000.

AorTech was also affected by a sale that fell through for the acquisition of its polymer business.

"The sale process was unsatisfactory due in the main to the difficult time frame that was imposed as a result of the dwindling cash position," the company said in a statement.

Funding was needed to bridge the timescale anticipated to a sale of the polymer business. AorTech concluded that the issue of loan notes was the only option for providing sufficient funds to the company and to protect the interests of shareholders.

Shares fell 4.40% to 87.00p at 11:40 Thursday.

RD

Advertisement
Advertisement

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

House price crash: UK property prices are falling – so where next?
Property

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020
The end of the bond bull market and the return of inflation
Inflation

The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020
How can markets hit new record highs when the economy is in such a mess?
Stockmarkets

How can markets hit new record highs when the economy is in such a mess?

Despite the world being in the midst of a global pandemic, America's Nasdaq stock index just hit an all-time high. And it's not the only index on a bu…
3 Jul 2020