DATONG sees profit as strategy pays off

YORKSHIRE intelligence and security tracking group DATONG has returned to the black after seeing recovery in its US markets, the launch of new products and the success of its diversification strategy.

Reporting its results for the 12 months to September 30, Leeds-based DATONG has seen revenues rise by 80% to £14.06m.

It made an operating profit before exceptional items over the period, which has seen the company move its year end to September 30, of £800,000, compared to a loss of £1.16m last year and adjusted pre-tax profits of £819,000, up from a loss of £1.14m.

Chief executive Dean Blood told TheBusinessDesk.com that the return to profitability followed a period of “hard work” for the company, which has to keep many of its products secret because of their sensitive uses.

Mr Blood said DATONG’s strategy of “internationalisation” – entering new markets – was starting to pay off and that interest in its ‘next generation’ of intelligence gathering products and services were attracting interest from across the globe.

He also said the performance of the US market, a key driver for DATONG, was encouraging and that intelligence was being seen as a key component of dealing with terrorism, border control and criminal activity.

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DATONG, which equips approximately 100 Governmental agencies in more than 35 countries, believes the UK National Security Strategy, and Strategic Defence Reviews of 2010, are examples of where governments are placing greater emphasis on spend allocation to emerging issues such as countering the terrorist threat via alternative approaches, such as increased intelligence gathering.

“We’ve seen some real good signs coming through of a continued recovery and that’s continued since the year end as well,” Mr Blood said, adding that this had prevented a trend seen in previous years of business seasonality from recurring over its last financial year.

He said: “I am delighted to report that the timely conversion of key market, new product and strategic developments in the period has resulted in a return to a full year operating profit. 

“Intelligence led customer operations are a key attribute to countering terrorism, targeting organised crime and preserving national security. DATONG is well positioned to support the concentration of forces across our markets on an international scale, especially in demanding operating environments. 

“Our expanded portfolio of products, which was launched in the period, has been well received and is positioned to deliver on its business plan.”

Mr Blood said geographical markets including the Middle East and South East Asia were potential growth territories for the company.

“The group’s strategy of diversification and its focus on investment in technology continues to drive the business forward,” he added.

Finance director Stephen Ayres said DATONG spent around £2m last year on R&D, and that the investment would start to pay off over this financial year.

Mr Blood added: “We have to keep ahead of the target audience for us, which is the criminal fraternity.

“It’s crucial for us to keep ahead of the game so we’re always looking to bring out new products.”