A party from the North East visited the design and manufacturing facility of Zytronic on 13 September at Blaydon on Tyne, just outside Newcastle.
Zytronic is a leading developer and manufacturer of a range of touch sensor interactive products. Their CEO, Mark Cambridge, and Finance Director, Denis Mullan, gave a comprehensive review of Zytronic's technical development, sales growth and financial progress since the company joined AIM in July 2000.
The presentation began with a brief review of its patented touch screen technology based on applying a finger to the screen, to change the capacitance. The basis of its development programmes have been to meet known market needs, it does not engage in 'blue sky' research, and its business development extends from R&D on the electronics and sensors to improvements in manufacturing processes and facilities, such as factory extensions and refurbishments.
From this beginning we were introduced to the range of Zytronic's products that have been developed to meet a large variety of markets. Zytronic exports over 90% of its sales, on a global basis, for a very wide and diverse range of applications, including ATMs, ticketing machines, and self-service and vending applications. The company's target markets include ultra large sensors for vending and digital signage use, kitchen equipment controls and home appliances, and medical applications.
The company's emphasis has been on steady growth, strong cash flow and comparatively low gearing. From increasing profitably, cash flow has gone from £1.3m in 2007 rising to £3.147m in 2010. Gearing has been reducing from a high of 31% to 11% over the past five years, indicative of Zytronic's prudent approach to its balance sheet. Consequently dividends have increased progressively each year from 3p to 4p in 2008, 5p in 2009 and 7p in 2010. It now has an impressive group of institutional shareholders with Axa Framlington holding 20% of the equity, with Henderson Volantis, Hargreave Hale and Blackrock invested as well.
The market for touch sensors is increasing and Zytronic is keen to grow too. Displaysearch market research, for example, predicts compound growth to 2015 of 13.4% per annum in the supply of touch sensors in increasingly large sizes, particularly in 10”-14” and 15”-19” screen sizes, for which Zytronic is well suited.
The eight of our members who attended were most grateful to Mark Cambridge and Denis Mullan for the time they gave to preparing and making their presentation, and for so patiently answering our many questions. And the factory tour afterwards showed that there are still centres of technical excellence in this country. All in all a most impressive visit: a pity more of our members didn't avail themselves of this opportunity.
John Hillman
