| Delays in giant screen production cause a giant drop in Screen Technology's share price |
| Written by Business Weekly | |
| Friday, 01 June 2007 | |
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Production delays in Screen Technology's giant ITrans display tiles, set to be installed in Virgin Megastores across the country, has caused the firm to issue a revenue warning for the year, precipitating a massive crash in its share price.
The Harston-based firm said that it expected revenues to be “materially lower” than market expectations owing to a delay in funding for the firm's first high speed tile machine, used to manufacture the huge tiles used in its ITrans display technology. Shares in Screen Technology plummeted almost 28 per cent, falling 11p to 28.5p following the announcement. Screen Technology said that 2006 sales will drop to £700k after its contract with Digital Screen Networks, originally for monolithic displays in 16 Virgin Megastores, was reduced to just four. The funding delay is a result of a takeover at German company, Wilden, reported by Business Weekly in March, which had previously agreed to fund the first machine. Following Wilden's acquisition, the commitment promptly evaporated forcing Screen Technology to look elsewhere for the funding and make the most of production from its existing, lower output tile manufacturing machines. The firm has entered into a lease-funding agreement with Investec Bank UK for £1.1m to finalise the acquisition of its first high-speed machine, it said in a trading statement. It added that Wilden had already invested over £1m in new mould tools and manufacturing equipment, and as such, the first high-speed machine is expected to start up at Wilden's manufacturing facility in the Czech Republic in Summer. Manufacturing capacity well above previous estimates is anticipated at the end of 2007, it said.
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