MED calls in administrators – and more technology failures feared

Published on Thursday 20 November 2008 21:17

A SCOTS company credited with developing the world's smallest television screen has become the latest victim of the global economic crisis, prompting fears that there could be a wave of business failures in the technology sector.

MicroEmissive Displays is to appoint an administrator after failing to find funding to support its pioneering business.

The Edinburgh-based firm, led by chief executive Bill Miller, said yesterday it had been hit by the "severe slowdown" in the demand for consumer electronics – and had been unable to borrow enough cash to survive .

MED, which has about 50 staff – evenly split between its operations in Scotland and Dresden, Germany – is continuing to trade and has not yet made any staffing cuts as a result of yesterday's announcement.

In June it said it was to cut five jobs after issuing a profit warning, saying monthly profitability would be delayed until 2009.

Last night technology entrepreneur and investor Ian Ritchie said he believed that , following the collapse, other struggling firms in the sector could suffer a similar fate.

He said: "I think it is very likely that a lot more technology companies will fold, like in the dot com bust in 2001, when a lot of good companies were wiped out.

"MicroEmissives is quite a big one and people will feel that it has gone, but there will be a lot of good smaller technology companies which will go missing without anyone noticing."

Ritchie, a former board member of Scottish Enterprise, added: "It is a real shame that MicroEmissives is to go into administration. It is not a good time to be looking for emergency cash because it is just not around."

The firm, listed on the Alternative Investment Market, suspended its shares following yesterday's announcement. The price before the suspension was 0.45p.

A spin-out of Edinburgh and Napier universities, the company warned in September that if it did not find new financing it would run out of cash by mid-December. Last month it reported a loss of 3.8 million for the six months to 30 June – an increase of 700,000 over the first half of 2007.

The news is the latest in a string of blows for Scotland's technology sector.

Fellow university spin-out Wolfson is battling with a plunging share price and the departure of its chief executive Dave Shrigley, as well as the loss of most of its business with iPod maker Apple.

Earlier this year, listed biotech firm Ardana and dental technology company Idmos both fell into administration after a period of poor trading, while in February, Stem Cell Sciences said it was closing its headquarters in the Scottish capital in favour of its facilities in Cambridge.

Adrian Smith, programme director with the Edinburgh Pre-Incubator Scheme at the University of Edinburgh, added: "I understand they have always had a problem shifting product. It's a shame because there are a lot of able people there and with a bit of luck they'll come through it, something will happen. It's discouraging for other people if they see companies having a hard time on a public market."

A spokesman for MicroEmissives said the company would issue another statement once an administrator was appointed.