Hong Kong loud and clear for NXT
NXT plc, the sound specialist best known for its flat panel loudspeaker technology, is to relocate its entire product design, customer support and commercial activities to Hong Kong from its current base in Huntingdon.A number of NXT’s engineers and marketers were seconded to Hong Kong earlier this year and their progress in achieving faster response times in product development with NXT’s key supply chain partners has prompted the firm to shift the remainder of the team.
The London Stock Exchange-listed company’s corporate governance will continue to be conducted from the UK as will its core research and development.
The NXT workforce of around 45 employees will also be reduced by 25 per cent in an effort to achieve annual cost savings of £1 million.
The majority of staff cuts will come from Huntingdon, prompting the firm to look for new and smaller premises elsewhere in Cambridgeshire.
NXT’s belief is that the efficiency drive will accelerate time to market and time to revenue for licensed products in standalone audio and consumer electronics sectors and also result in productivity gains in face-to-face communication and operations with partners and their factories.
In its interim results for the year ended 30 June 2006, NXT reported a 10 per cent rise in turnover to £3.21m (2005: £2.89m). Though the company also reduced its pre-tax loss to £3.85m (2005: loss of £5m), the market sliced more than 11 per cent off its share price, which was down 4 pence to 30.5 pence a share.
Speaking on the company’s interims, David McKay the NXT chairman, said: “With our stand-alone audio team now based in Hong Kong we are better positioned to focus resource on partnerships which can drive scale in our business.
“The progress and productivity gains already achieved have encouraged us to examine closely the future of our embedded audio business, currently based at our technology centre in Huntingdon.
“Most of the critical supply chain partnerships for embedded applications such as mobile phones, display and TV, and automobile, are also centred in the Far East.
“We have concluded that we shall relocate all product design, customer support and commercial activities to our existing facility in Hong Kong, thereby making it a major commercial centre for the business.”
The relocation also includes two members of the NXT executive board, Graham Ryan – chief commercial officer – and Peter Thoms – chief operating officer and finance director.
Henry Azima, chief technology officer, McKay and the other non-executive directors stay in the UK alongside the core functions of research, licensing, intellectual property and head office administration.
“We anticipate annual potential cost savings approaching £1m enabling us to manage cash and resources more effectively,” said McKay.
“In Hong Kong working more closely with our key supply chain partners, we expect faster time to market – and revenue – across the product range.
“Hong Kong is situated only an hour away from the Pearl River Delta, the manufacturing base for many of our key partners. This proximity enables us to forge much closer links with them, and as a result we have seen a marked improvement in the productivity of our combined activities in identifying and commercialising new products.
“In the short term, we expect growth will be driven by the standalone audio sector aided by the relocation of this division to Hong Kong.
“The directors are confident that these changes, which represent a substantial reinforcement of our recent strategy and direction, not only preserve and refocus our core assets but also provide a stronger foundation to more effectively exploit our full potential.”
NXT is responsible for the development of the Distributed Mode Loud-speaker (DML), an award-winning audio technology that can be applied across numerous industries to create highly differentiated products and solutions.
As well as the Huntingdon and Hong Kong operations, NXT has offices in Yokohoma, Japan and Mountain View in California.