Auditors’ warning on Astek’s future

AUDITORS handling the Cheshire dental products group Astek have warned the business could run out of cash if it does not hit sales forecasts.

The company’s accountant Hazlewoods warned that a net loss of £66,504 combined with product delays and slow sales, indicated “the existence of a material uncertainty which may affect the group’s ability to continue as a going concern”.

During the year sales rose 25% to £1.3m but the group made a pre-tax loss. However, it cut last year’s loss from £552,651 to £155,287.

The auditors said the group’s cash resources had been depleted by delays in bringing the InSafe syringe to market and a downturn in sales of Astek’s proprietary disposable air water syringe system Pro-Tip following a change in ownership of the distributor. It also incurred professional costs following an aborted acquisition.

Hazlewoods said steps taken by the board to secure the position of the group meant it was appropriate to prepare the accounts on a going concern basis. But it added that the board’s forecasts were based on some factors beyond their control.

“If significant delays or underperformance by distributors were to take place, these may render the group’s cash resources insufficient,” said the auditors in an emphasis of matter clause in the results.

Chairman Jeffrey Rubins admitted it had been a “difficult” year, “with various factors negatively impacting these results including the general downturn in the economy which has also affected the dental sector of the market.”

The Altrincham-based business sources its equipment in the Far East and sells it in the UK and the US. Mr Rubins said that the strength and volatility of the dollar has affected its results for the year to March 31, despite adopting a hedging strategy.

He said: “The management team has responded by revising the price list and selling in dollars and euros wherever possible and appropriate.”