MicroEmissive wins £2m screens contract

MICROEMISSIVE Displays, maker of the world's smallest television screens, has rekindled hopes of becoming a star of Scotland's technology sector by announcing its first major sales deal.

Yesterday AIM-listed MED said it had signed a 2 million deal to provide the polymer displays to an unnamed Asian consumer-products manufacturer.

The deal is the first of any commercial note for the Edinburgh-based company - turnover in the first half of the year was less than 50,000 - as it embarks on a move from technology development into volume manufacturing next year.

Chief executive Bill Miller said that, since announcing the move to production manufacturing, the product had attracted significant interest. He said other deals could be announced before volume manufacturing was underway in the second half of 2007.

"There are things currently in the pipeline that I can't talk about, but I'm absolutely confident that the technology is going to take off."

The sales deal, announced with a trading statement that said progress on the company's manufacturing plant in Dresden in Germany was on schedule, sent shares up 4p, or 13 per cent, to 35p.

The light-emitting screens, smaller than a thumbnail, are initially being targeted for use in wearable headsets for leisure markets, giving the user the effect of a 32-inch television screen close to the eye.

Inquiries about the product have been coming in for uses as broad as digital cameras, medical applications, thermal imaging and even the military. "It has turned out there are a number of opportunities we simply hadn't thought of," he said.

A combination of a state-of-the-art production facility and improved technology had improved reliability of the screens and dramatically increased their average usable life, from a few hundred hours to "well in excess of 5,000 hours", he added.

The new production line in Dresden, which will cost about 6m to set up, will provide the company with enough capacity for 50m in annual sales.

The first employees have been hired at the plant and MED plans to be ready to begin manufacturing and shipping the product in the second quarter of 2007.

The company said it was aiming to be cash positive by the end of 2007 and record its first full-year profit in 2008. In 2005 the company recorded a pre-tax loss of 5.2m.

The company was founded as a spin-out from Napier and Edinburgh universities in 1999 and has gained a place in the Guinness Book of World Records for the world's smallest television screens.

It raised more than 10m from angel backers including Braveheart Investments and Archangel Informal Investments before raising 15m in its flotation in November 2004.

Despite consistently being tipped as one of Scotland's greatest technology hopes, the past 18 months have seen most of its value wiped off the market, amid reports of reliability problems and production delays, with co-founder Dr Jeff Wright quitting as chief technical officer in June.

Listing at 152p, in March 2005 the shares reached a high of 176p. However this crumbled to just 24.5p in September when the company announced a share placement plan to raise 5m.