Blog: Eleksen on the block
Leonie Barrie | 16 October 2007
Executives at smart fabrics and textile touchpad maker Eleksen Group Plc have been warning for several months that funding levels were running critically low. But even so, the revelation that administrators are now trying to sell the business has come as something of a shock.
Eleksen is one of the most commercially advanced UK-based companies in the smart textiles field – which is itself one of the most exciting markets to emerge in recent years. The company specialises in touch-sensitive textiles to control equipment for electronic entertainment, particularly iPods, and has raised its profile by teaming up with companies from M&S to Ermenegildo Zegna to take its vision to the mainstream apparel market.
But such innovations don’t come cheap. Massive investment is needed to expand production capacities, develop new technologies and broaden the company’s customer base in the US and Far East.
The financials speak for themselves. In 2006, which was Eleksen’s first year as a public company, sales soared by 167% to GBP3.5m. But the warning signs were already there, with the costs of achieving its listing, coupled with heavy investments in personnel, widening full-year losses to GBP4.22m from GBP2.73m.
And last month the firm’s interim results showed a wider loss of GBP3.21m (US$6.6m), as revenues tumbled 68% to GBP581,000 from GBP1.8m.
The Administrators are now inviting offers for the business and its assets, but warn “the existing business requires substantial working capital to further develop its brands and broaden its market.”
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