Neotronics Technology Plc hopes to be led out of its current downturn by its Neotronics Olfactory Sensing Equipment, or NOSE. It has seen the slide in US sales of its gas monitoring equipment continue and has paid the price in its year-end figures. Pre-tax profits for the year to September 30 plunged 53.8% to ú1.8m on turnover down 7.3% at ú19.9m. The Bishop’s Stortford, Hertfordshire-based manufacturer of safety and environmental monitoring equipment has set up a subsidiary, Neotronics Scientific Ltd to market Electronic NOSE, based in Stanstead, Essex. The NOSE analyses vapours to enable users to detect differences in batches of food, beverages, perfumes and other odouriferous products. The group has taken a charge of ú355,000 for the development and marketing costs of the Electronic NOSE, and although revenues have started to flow, the group is looking for third party investment in the new subsidiary. We’re looking for probably a couple of million sterling. We are actively talking to people about it, Andrea Gotley, operations director told Reuters. Neotronics said it fell victim to agressive pricing policies by US competitors in what is still its core market, which contributed to a 12.5% drop in sales in the US to ú8.4m. The group’s other markets also saw a drop in sales, though by much smaller margins. To aid recovery, the company has restructured its marketing and distribution network at its Gainesville, Georgia US headquarters. The group’s Solomat subsidiary, which sells air and water quality monitoring equipment, stands to benefit from imminent US environmental legislation and pressure to ban smoking in public buildings. Similar legal developments and economic growth in the Far East have led to the establishment of an office in Singapore and a distribution agreement in China. Investment in research and development has been in line with previous years, the ú1.3m representing 6.7% of turnover, but the firm has managed to shave 15.6% off its administrative expenses. Chairman Paul Gotley took the opportunity to advertise the company’s shares as a good bet in his statement, with profitability now recovering in the US, and the potential for growth in its NOSE markets he claimed to have a number of indications that there are many investors who place a high value on the future of this project. The shares are currently at 48.5 pence. The directors propose a dividend of 1.70 pence per share, 35% down on last year.
