Troubled 3D Diagnostics is latest Scots firm to scrap market listing

By PETER RANSCOMBE
Published on 06/08/2012 08:53

SCOTLAND is on the verge of losing another company from the stock market after dental device maker 3D Diagnostic Imaging unveiled plans to ditch its Alternative Investment Market (Aim) listing as it cut its costs.

Shares in the Dundee-based penny stock plunged 54 per cent as the firm, which has issued a series of profit warnings over the past year, unveiled a “major cost-cutting exercise” despite a rise in sales.

More than 75 per cent of 3D’s shareholders must vote in favour of leaving Aim for the de-listing to occur. The board has not yet set a date for its extraordinary general meeting.

If investors vote in favour of the de-listing then 3D will become the latest in a string of Scottish companies to leave the stock exchange.

East Kilbride-based Robert Wiseman Dairies left the main market in January after its take-over by German yoghurt giant Müller, following in the footsteps of life sciences pair Axis-Shield and ProStrakan, which were both acquired by foreign buyers last year.

Lees Foods – the Coatbridge-based maker of meringues, snowballs and teacakes – exited the stock market last month after management took the firm back into private hands.

Goals Soccer Centre is expected to follow suit after directors at the East Kilbride-based five-a-side football pitch operator backed a £73 million takeover bid from the Ontario Teachers’ Pension Plan, while cashmere clothing maker Dawson International has warned it may enter administration.

The only firm to float so far this year has been Livingston-based gas meter specialist Energy Assets. Its Glasgow-based peer, Smart Metering Systems, joined Aim last year.

3D said: “One of the principal objectives of the company’s listing on Aim was to provide it with access to development capital as the business grew. “However, it has become apparent that, in the current market environment, this objective cannot be met and, as a consequence, the board no longer feels able to justify the continued costs associated with the company’s admission to Aim.”

The firm is pushing ahead with its “major cost-cutting exercise” despite a rise in sales during the first six months of the year, “albeit from a modest base”.

Chief executive Graham Lays will take a 60 per cent pay cut, while chief financial officer Oliver Cooke will go without 80 per cent of his pay in efforts to take costs below £60,000 a month.

3D has made two posts redundant, taking its headcount down to seven, with all remaining staff having agreed to an average pay cut of 25 per cent.

Chairman David Snow has again waived his entire pay packet, as he and his predecessor, James Noble, have done over the past 15 months. Each of the directors had already given up a third of their salaries over the same timescale.

The group added: “As a consequence of this reduction in the company’s liabilities, the significant reduction in its overhead base and of the rising sales trend, the directors believe the company currently has sufficient cash resources to meet its immediate requirements.

“However, for the sake of prudence, the directors will continue to explore various options by which the company’s balance sheet can be strengthened.

“The directors believe that with only a relatively small amount of additional capital the company will be robustly positioned to grow into the future.”