Parent company of Dundee-based CarieScan says device manufacturing fault further impacted on sales
The parent company of Dundee medical imaging firm CarieScan has reported a huge drop in first half revenues.
Revenue for the six months to December 31, 2011 dropped 88 per cent on a year ago to just £67,739 and gross profits fell by 93 per cent to £27,376.
However, operating expenses dropped by 26 per cent to £1.01 million and operating losses were up slightly – 1.6 per cent on the same period last year to £987,323.
3D Diagnostic Imaging owns the rights to the CarieScan Pro imaging device, a market leader in the detection and monitoring of tooth decay.
The drop in sales came after functionality issues were identified in the device as a result of a manufacturing fault.
3D said the gross profit figure has been “adversely impacted” by one-off costs associated with upgrading products in the field and existing stock.
The board of 3D is now looking at ways to strengthen the company's balance sheet, and is exploring a partnership with another company in the dental sector “with adequate resources and an existing international distribution infrastructure”.
3D raised £1.41 million of new equity last year after reporting a loss for the year of £2.4 million.
The company's cash position as of December 31, 2011 was £1.18 million compared with £2.27 million at the same point a year earlier.
3D said today in its first-half interim results statement, problems with the functionality of the CarieScan PRO device identified in December 2011 had been addressed and the device re-engineered.
It added “virtually all of the products in the field had been fully upgraded” by the end of February 2011.
3D said today cost cutting measures implemented last year, including the closure of its US office and bonus deferrals to directors in an effort to save £750,000, had helped to lessen the impact of poor first half sales.
The company also replaced its own sales force with US-based specialist dental sales firm CoreStrength last year.
3D said further cost reductions had been realised by transferring control of the company from the Isle of Man to Dundee.
David Snow, interim non-executive chairman of 3D Diagnostic Imaging, said: "This has been a period of mixed fortunes for the company with a number of major achievements.
“Whilst we were disappointed with the level of sales traction we achieved in the six months to 31 December 2011, we now see some early signs of an improvement in trading as a result of the initiatives we have subsequently put in place.
“The board continues to review the company's strategy and also consider potential ways to further strengthen the balance sheet."
Shares in AIM-listed 3D Diagnostic Imaging Plc dropped by eight per cent in early trading today.