Zytronic, the Gateshead-based manufacturer of touch overlay sensors, is exploring several options, including a potential sale or solvent liquidation, following a strategic review prompted by financial difficulties. 

The company, which specialises in producing sensors for self-service, gaming, and industrial applications, has been battling a significant sales downturn. Despite efforts to recover post-COVID, Zytronic’s revenue dropped from £20 million in 2019 to an expected £7.2 million for the financial year ending September 30, 2024, down from £8.6 million the previous year.

The company’s financial struggles were exacerbated by the bankruptcy of a key North American client, Aruze Gaming America, and broader supply chain issues that led to customer overstocking. Despite an anticipated 22% increase in revenue in the second half of FY24 compared to the first half, Zytronic’s board has acknowledged that a substantial recovery in sales volumes is unlikely in the near future.

In the accounts published in February, which revealed a £2 million loss, then-chair Chris Potts highlighted that one of the company’s key customers had filed for bankruptcy, significantly impacting orders. He also noted that the company’s ongoing struggles were tied to the “lack of sustained recovery,” which he attributed to the continuing effects of international events on the business.

In light of these challenges, the company is considering various strategic options, including a new business plan to regain market share, a potential sale, or an orderly solvent liquidation of its assets. Zytronic is also weighing the possibility of delisting from the AIM stock market, a move that would reduce the costs associated with being a publicly traded company. As part of this process, the firm has entered an offer period but clarified that no active sale discussions are currently taking place.

The board has emphasised the need for a strategic catalyst to drive significant improvement, as current measures have not delivered the desired results in a challenging macroeconomic environment.