City vultures were today circling over a UK technology company giving every impression of being mortally wounded – sending the shares of Pursuit Dynamics (PDX) crashing over 78 per cent.The company, based near Cambridge UK, saw its AIM stock nosedive 55.50p to 15p after losing Procter & Gamble, the multinational manufacturer as a potential customer.
Procter & Gamble had been evaluating the PDX technology in trials but says it won’t be pursuing further talks, evaluation or development at this stage.
As a result, Pursuit's revenues for the year ending September 30 – due to be announced this Thursday – will be materially below its earlier expectations.
PDX, which has developed the PDX Atomiser and PDX Reactor products for a range of industries from fire fighting to brewing to biofuels, said it would accelerate a strategic review of other commercial opportunities to plug the gaping hole left by P & G’s withdrawal from the scene. It will report on progress by the end of June.
Interim CEO, Jeremy Pelczer, said: “We are obviously extremely disappointed with the decision by P&G. Although the resulting revenue shortfall will constrain growth we will continue to pursue a range of commercialisation opportunities while we conduct the strategic review.”
Pursuit was plunged into crisis late last year when CEO Roel Pieper quit, losses almost doubled and revenues nosedived for the year to September 30. News of a proposed rights issue to raise £9.38 million couldn’t prevent the share price losing 123p – 60.52 per cent – to 80.25p.
Revenues for the year had plummeted to £490k from £128k. The loss before tax was £15.3m – up from £8.7m last time. The company had cash of £7.3m at period-end.
It said it would enter 2012 with “improving contract visibility and confidence that the revenue profile of the business will develop as expected.”
P&G’s decision appears to have burst that particular bubble and PDX faces a hell of a fight to bounce back from here.