Elektron suffers 'particularly disappointing' December and January

Elektron Technology shares declined on Friday after announcing that sales from continuing operations in the year fell following a 'particularly disappointing' December and January.

Elektron Technology shares declined on Friday after announcing that sales from continuing operations in the year fell following a 'particularly disappointing' December and January.

A "modest" upturn was seen in the third quarter compared with the equivalent periods in the previous year, but this was not sustained to the year end.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Full year sales from continuing operations were approximately £55m, compared to £63m the previous year.

Net borrowings at January 31st are expected to be less than £6.0m (2012: £4.4m), reflecting the investment in restructuring and new product development.

Advertisement - Article continues below

In a statement the group said: "It will take some time for the results of the new product development programme to outweigh the effect of the economic cycle on the group's legacy product portfolio. We therefore expect a further reduction in sales from continuing operations in the coming year.

"However, with a pipeline of NPD activities, continuing investment in recruiting a high calibre management team and further cost savings through streamlining Elektron faces the future with confidence.

"Elektron's products are on relatively short lead times, so the order book provides very limited visibility of future sales."

The company also said that it sees the diversity of its product range as a strength, but admitted aresas of the portfolio are of low, no, or negative growth.

As such it has focused on developing new products as its product portfolio is mature in its life cycle, naturally leading to a reduction in demand for some products.

Elektron is now undertaking a managed cull of underperforming brands and products to "ensure that investment is focussed on areas with the most potential for profits and growth".

Advertisement - Article continues below


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
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

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
Share tips

Class acts going cheap: buy into Europe’s best bargains

Value investing appears to be making a comeback, while shares on this side of the Atlantic are more appealing on metrics such as price/earnings ratios…
16 Jan 2020

Most Popular

Global Economy

Helicopter money is coming very soon – but what form will it take?

We’re heading for a”new normal”, says John Stepek – fiscal stimulus, and lots of it. Here’s what that really means.
16 Mar 2020

The helicopters are being warmed up – we might be closer to a bottom than you think

Governments are starting to act to bolster their economies against coronavirus. But, asks John Stepek, will throwing money at the problem slow the mar…
17 Mar 2020
Investment trusts

Now could be a good time to bag an investment bargain

We like investment trusts here at MoneyWeek. And they can be even better during a market crash.
16 Mar 2020

The rare earth metal that won't be a secret for long

SPONSORED CONTENT – You can’t keep a good thing hidden forever; now is the time to consider Pensana Rare Earths and the rare earth metals NdPr.
31 Jan 2020