The Courier & Advertiser (Angus and Dundee)
Extent of losses at Dundee dental tech firm revealed
DUNDEE 3D Diagnostic Imaging racked up multi-million-pound losses in a matter of months after its shares were listed on the AIM market.
Senior management had hoped the company — the parent of dental technology firm CarieScan Ltd — would gain access to significant new development capital as a result of its November 2010 stock listing.
But new figures released yesterday show the move backfired, and in the two years to June 30 the firm accrued pre-tax losses of more than £4.1 million.
Australian investor Donald Strang is currently bidding to take control of 3D with a view to turning it into an investment house focusing on opportunities in oil, gas and minerals.
Under the plan — which shareholders will have a chance to vote on later this month — CarieScan would be moved into the newly-formed private company 3D Diagnostic Imaging Ltd (3DIL) and stock transferred to 3D’s current shareholders.
In a half-yearly update to the stock exchange yesterday the company revealed it had made a £1.71m pre-tax loss in the 12 months to June 30, 2012.
The figure is on top of a £2.44m loss made in the previous year, meaning cumulative losses for the past two years of £4.15m.
Turnover amounted to £895,987 in the 24 months to June 30, 2012, with a significant drop-off in the second year period when total revenues achieved by the company were just £181,062.
In his statement non-executive chairman David Snow, who will step down alongside chief executive officer Graham Lay should the Strang proposal be given the green light, said revenues in the year to June 30 had been “very disappointing” and the financial performance of the business had not matched the achievement of producing one of the “most innovative” dental diagnostic products currently available.
He said it had taken considerably longer than directors had anticipated for the CarieScan device to gain traction in the market, and the board had instituted a fundamental review as a result of the underperformance.
The company has previously announced that a number of directors had taken pay cuts and staff had agreed to a 25% reduction in their salaries in order to reduce costs.
In August it also revealed its intention to de-list from the AIM in order to cut costs further.
However, the emergence of a bid for 3D put that process on hold, and Mr Snow yesterday said the company’s board had now concluded that Mr Strang’s proposal should be backed by investors.
He said it would allow CarieScan — under 3DIL’s ownership — the chance to be developed in a new lost-cost environment that would give it the best chance of succeeding in the long-term.
“Upon completion of the proposals the board of 3DIL will seek to raise additional capital to finance the company’s sales development operations and its other working capital requirements.
“The directors believe these proposals are in the best interests of shareholders as they significantly reduce the cost base of the operating business, maintain the current ownership of that business and give shareholders an additional opportunity to recover value from their investment in the company.”