Zytronic faces uncertain future as sale or closure looms

Zytronic, the North East tech firm renowned for its touch screen technology, is on the brink of a significant change. The company is actively seeking a buyer to secure the future of its business and safeguard jobs. However, the possibility of a complete closure has not been entirely ruled out.

The Blaydon-based manufacturer, which supplies touch screens for a wide range of industries including gaming, vending, and electric vehicle charging, has appointed restructuring specialists FRP Advisory. This move follows a period of consultation regarding the company’s future.

Zytronic has informed investors on the London Stock Exchange of its intention to either sell the business or initiate a solvent liquidation. The company, which employs approximately 110 people at its Tyneside facility, has faced persistent challenges in recent years, with trading conditions remaining weak.

In a recent update, Zytronic attributed the decision to sell or wind down the business to the ongoing lack of improvement in trading conditions. The company has also considered delisting from the AIM stock market as part of cost-cutting measures.

The company’s financial performance has deteriorated significantly. Unaudited annual results revealed a decline in revenue from £8.6 million to £7.2 million for the year ending September, falling short of the projected 22% increase in the second half. Several of Zytronic’s customers in North America had been affected by the bankruptcy of Aruze Gaming America, while wider overstocking due to supply chain concerns had also hit it hard.

Zytronic’s statement said: “Whilst the company is expected to generate a 22% increase in revenues in the second half of FY24 versus the first half, trading conditions remained challenging and based on current order intake, the board does not anticipate a material recovery in volumes over the short to medium term. The company has witnessed a sustained lack of recovery in business performance to its pre-COVID operating level and management’s efforts to battle against a difficult macroeconomic environment have not delivered meaningful results. After observing disappointing volumes in FY24, the board has come to the opinion that it is unlikely that a significant improvement will be forthcoming without a strategic catalyst.”

Image source: Zytronic