Elektron

Electronic components manufacturer Elektron has had a wretched time over the past few years, with the markets for its products (notably in telecommunications) collapsing, causing a cash crunch that has led to sweeping management changes, the sale and leaseback of property and the utilisation of invoice discounting facilities that fluctuate with the level of sales. Operating losses on continuing operations were only £118,000 during the year to January. However, this was before £697,000 of exceptional costs on cost reductions and restructuring, a £1.4m hit from the closure/disposal of subsidiaries Bulgin Power Source, Powertron and AFI, plus £636,000 of losses from those operations. It is a sorry state of affairs for investors, though executive chairman Adrian Girling says that 'it would appear that we are now through the worst, with operating subsidiaries and the Group trading profitably to date in the current financial year'. The remaining subsidiaries are Bulgin Components (a designer and manufacturer of switches, connectors and other electromechanical components), Milmega (a fallen star and maker of microwave amplifiers) and BP Purchasing (which sources additional components for clients). Between them they made £11.1m in turnover last year, so there is undoubtedly still potential upside in the shares. At such a measly rating as this, investors should hold on and hope for the best.

Sector: General Industrials

Companies: Elektron Technology

Market cap: £1m

PE Forecast: n/a

Share price: 2p

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