Elektron Technology in talks with lender after tough year

11th Feb 2014 08:42

Elektron Technology has launched talks with a lender about changing its funding arrangements after a "disappointing" year, hitting its shares.The group, which makes food safety monitoring systems, power and data connectors and other hi-tech equipment for industry, said it was in discussions about varying certain conditions of a revolving credit facility due for renewal in April 2016 "to reflect the recent trading of the business".Elektron said financial performance in the year to January 31st had been disappointing as disruption to production mainly in Tunisia, restructuring costs and other expenses increased debt to £8.2m from £5m a year ago.Despite that, it said it was still meeting its debt repayments and its lender remained supportive.It said operations had stabilised and its sales backlog had reduced to normal levels by the end of the year.Elektron has raised some prices and cut its operating costs, resulting in "a welcome improvement" in underlying second-half trading.Second half sales from continuing operations rose £1m to £24m against a year ago, although annual sales on the same basis fell to £46m from £49m last time.Elektron boosted investment in new products during the year to about £1.9m from £1.4m a year earlier."The group believes this level of investment has to be maintained if it is to generate revenue growth from both new innovation and extensions to existing product ranges," it said.Shares fell 0.62p or 9.26% to 6.12p in early trading in London.PW