Zytronic's revenue growth offset by narrowing margins

Zytronic's revenues improved during the second half of its trading year, but the increased level of business meant that new designs and production techniques squeezed margins more than expected.

Revenues rose 10% to £11.7m in the second six months of the year, resulting in total revenues for the full year coming in-line with market expectations at £22.3m.

However, the touch-screen manufacturer warned that the increased business had required the introduction of some new design and production techniques which had resulted in lower than expected margins, particularly in the final two months of the financial year.

Zytronic also told investors that a spurious patent claim had been settled for £72,000, plus the group's own cost of £240,000.

The AIM-listed outfit stated that lower margins, coupled with the litigation costs, resulted in the group's full-year pre-tax profits coming in at approximately £4.2m, behind market expectations.

Zytronic assured investors that operations would continue "as is normal" and that it would address the new product designs and production techniques to bring through improvements to margins.

As of 0840 BST, Zytronic shares had tumbled 11.06% to 378p.