Listed Gateshead firm Zytronic is to wind down operations after considering several options including solvent liquidation or a sale following a strategic review.
A manufacturer of touch overlay sensors for interactive displays dating back to the 1940s, Zytronic employs more than 100 people. It appointed a new chair in 2023 in a bid to turn around its fortunes after sales failed to recover to pre-COVID levels.
The company’s technology – manufactured in three factories in Blaydon – is used in self-service, gaming and industrial applications.
“The board has concluded the sale process for its trading subsidiary, Zytronic Displays Limited, and its underlying assets. Despite engaging with multiple counterparties, the company was unable to agree on suitably attractive terms for a transaction,” it said in a notice to the London Stock Exchange.
“As a result, the board, in consultation with FRP Advisory Trading Limited, will commence the orderly wind-down of the group’s assets.
“At this stage, there can be no guarantee as to the level of returns that may be available to shareholders.”
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The group’s net cash position is around £3.3m but excludes wind-down costs.
“FRP Advisory is in late stages of finalising its outcome statement which will provide shareholders with an indicative range of returns available in an orderly wind-down,” Zytronic added. “Further announcements will be made in the coming days.”
In 2019 the firm generated £20m in sales. It now expects to report unaudited revenues for the financial year ended 30th September 2024 of £7.2m, a fall from £8.6m in 2023.
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.
Options on the table had included the implementation of a new strategic business plan, an orderly solvent liquidation of the company’s assets, the potential sale of the company, delisting and continuing as a private company, and selling the assets and continuing as a cash shell.
Solvent liquidation is when a company chooses to wind down despite holding assets valued more highly than its debt obligations.