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UK – Quixant cites Covid-19 for pre-tax loss

By - 30 September 2020

Quixant has cited the impact of Covid-19 pandemic as they published interim results for the first half of 2020. The group reported adjusted pre-tax loss of $1.2m compared to a $3.4m profit in 2019, with revenue falling 33 per cent to $27.9m.

Quixant praised resilient trading from Densitron, careful management of its gaming customers and prompt management of overheads that have enabled the business to end the half with a healthy net cash position.

Net cash from operating activities was $0.3m (H1 2019: $6.7m), with $14.2m at the end of June improving to $17.4m as of 28 September 2020.

Jon Jayal, CEO of Quixant, commented: “I am delighted with the way our team has risen to the unprecedented challenges of the last six months and delivered results significantly better than in the pessimistic scenarios considered as part of our 2019 year end audit and presented in March 2020.

“We moved quickly to adjust to different working conditions alongside the rapid and significant changes in demand from customers. Thanks to strict financial discipline and close collaboration with our customers we have maintained a healthy net cash balance and have strengthened many of our customer relationships further.

“This puts Quixant in a strong position to benefit from the recovery in our global end markets. Alongside this we see a clear opportunity to draw on our history of innovation, stepping up to deliver what customers are looking for from us now.”

Overall revenue fell year-on-year from $41.9m in 2019 to $27.9m. Broken down, Quixant gaming division revenue was $11.9m (down from $23.6m); gaming platforms revenue $10.6m (a fall from $19.6m); and gaming monitors revenue $1.3m (previously $4.0m). Densitron division revenue was $16.0m (down from $18.4m). Gross margins remain the same as last year at 36 per cent.

There has been a gradual improvement in gaming division revenues since venues began to re-open in May, with early signs of recommencement in orders and deliveries and new business early in the second half.

Densitron remains resilient despite COVID-19 and Quixant expects to post growth in the broadcast and medical markets in 2020, alongside a return to profitable trading in the second half to offset some of the reported loss experienced in the first half and recovery continuing into 2021, excepting the impact of any further widespread global lockdowns as a result of COVID-19.

Mr. Javal added: “We are working on introducing new business models with the aim of unlocking more repeatable revenue streams and grant us access to new market opportunities.

“Quixant is a strong business with excellent customer relationships and innovation at our core which, combined with our strong financial position, we believe will drive excellent stakeholder value over the long term.”

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