Chairman of AorTech quits after losses soar

Published on Tuesday 19 November 2002 00:00

EDDIE McDAID is to stand down as chairman of AorTech International after the Scottish heart-valve developer reported a 49 per cent increase in first-half losses and a worse than expected slump in sales.

The Bellshill-based firm also said it was planning to move from an official listing to the Alternative Investment Market after a 94 per cent plunge in its share price in the past 12 months.

Mr McDaid, who spent six years as AorTech’s chief executive before becoming chairman in July when the current chief, Bill Strachan, was appointed, said he will stand down from the group tomorrow.

He will be replaced as chairman by Laurie Rostron, a venture capitalist who is currently chairman of Cambridge-based Ranier Technology.

Mr McDaid said: "I feel that now is an appropriate time for me to step down and hand over the reins to a highly competent professional management team.

"I am confident that Bill and Laurie, with the support of the executive management team, will be able to increase value from the technology base that AorTech has developed."

His comments came as AorTech posted a pre-tax loss of 7.6 million for the six months to the end of September, compared with

5.1m for the same period last year. Turnover fell 57 per cent to 851,690 - the company had predicted a 45 per cent slide in September, but the sales decline was exacerbated by the "unforeseen" return of a product from a customer.

Mr McDaid’s departure follows the laying off of 50 staff at AorTech’s Bellshill base earlier this year and the closure of its US office with the loss of 12 jobs.

The firm also pulled out of its planned 36m acquisition of the critical care division of rival Becton Dickinson, and the two firms recently ended their European distribution deal for AorTech’s TruCCOMS heart monitoring system.

Although sales of TruCCOMS have been slower than expected, Mr McDaid said a new distribution agreement has seen good progress in the UK and Italy, and the product "continues to be one of AorTech’s value propositions".

He said the company, which had cash reserves of 9m at the end of September, will look at disposing non-core parts of the business in order to cut its cash burn rate - which totalled 16m last year - to around 6m this year.