Touch screen tech specialist Zytronic has described a "false dawn" recovery in 2022 having suffered a fall in revenue and profits.

The Tyneside manufacturer said the Chapter 11 bankruptcy of one of its major end customers - Aruze Gaming America's (AGA) - as well as component shortages, had been compounded by resignations of key staff including a sales and marketing director. New results published to the London Stock Exchange show a decline in revenue from £12.3m to £8.6m in the year ended September 2023.

A pre-tax loss of £2m was reported, compared with a pre-tax profit of £700,000 in the year prior, as gross margins also fell away and bosses took the decision to reduce the firm's working week, offering its own furlough scheme of up to 70% for time not worked. As the shortage of work continued that developed into a downsizing of the workforce in which 14 staff were made redundant at a cost of £100,000. Shares fell 27% in early trading following the announcement, to 58.3p.

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Chair Chris Potts said the lack of a sustained recovery was linked to the impact of international events on business and its exports, saying Zytronic's supply chains and markets have been potentially permanently changed by the pandemic and its after effects.

Zytronic, which sells touchscreens into the gaming, vending, financing, industrial and advertising sectors, said that it had seen decline across its customer base with the largest fall in gaming. In total the firm supplied only 43,000 units in during the period, versus 60,000 in the year prior.

Despite the difficult period, the Blaydon-based company continued with research and development work, including designs for shelving and retail tables with wireless charging capabilities and touch-integrated round and square LCD monitors. And during the year patent protection was granted in the US, Japan and South Korea.

Mr Potts, non-executive chair, said: "With the trends exhibited in the second half of FY23 continuing in the first quarter of FY24, revenues in the current year to date are lower than the same period last year. Nevertheless, the group benefits from a strong balance sheet and has good visibility over its cost base over the next twelve-month period. With reinvigoration of the group's business development function and differentiated technology and products, there are grounds for cautious optimism over the medium term."