LONDON Cyan Holdings plc (Cambridge, England), the fabless semiconductor company that designs microcontrollers, made a loss of £4.6million (about $9.2million) in the year ended December 31, 2007.
Dr John Read, the group's chairman said it had entered the year with a new range of products but without any notable sales traction. “Since its inception Cyan has established a good track record of creating quality products, but it has struggled to match them with market needs. With this in mind the senior management of Cyan has been thoroughly restructured during the year, most significantly through the appointment of Kenn Lamb as CEO.”
“Kenn identified two core problems with the Group’s strategy. On the one hand there was a dogged persistence to compete at a component level with industry majors such as Texas Instruments and Renesas, while on the other, producing product which was technically excellent, but could not be manufactured at a cost customers were willing to pay for it,” added Read.
“Kenn has led the senior management of the Group in addressing these two core weaknesses head on and is in the process of executing a new business strategy that will offer the potential for the group to enjoy sales penetration for the first time.”
Turnover of £33,000 (2006: £269,000) is indicative of the lack of sales penetration effected by the companies former strategy. “We do however, expect to see the fruits of our restructuring efforts come through in the first half of 2008,” said Read. “In the same way the cost burden of 2007 which resulted in an operating loss of £4,648,000 (2006: £3,009,000) is inflated by a number of one off restructuring costs, both in restructuring the management team and re-engineering the company’s product range. These costs, amounting to £1,047,000 have been necessary in order to get the Group into a position where it can deliver sales and market penetration at the earliest possible opportunity.”
Lamb added, “When I joined the Group on April 11 last year, it was apparent that its future success would depend on a major reappraisal of the business strategy and further funds to implement that strategy. On completing that reappraisal, in July 2007 the group successfully closed a £5million (about $10million) fundraising so that it could execute our new strategic business plan.”
The first six months post fundraising were allocated to a restructuring of the group to ensure that it possessed the skills, products, market position and partners necessary to deliver the second and third phases of the plan.
The company has now established a completely new European sales team, recruited an experienced operations team, expanded its marketing team and made a significant investment in expanding the software development team.
Cyan has already announced partnership with Adaptive Modules, a company active in the RF Module market, and is moving forward with four further partnerships, of which two are at an advanced stage of negotiation, with a further two progressing well but at an earlier stage.
“These partnerships are intended to establish mutually profitable relationships with established companies operating in all three global geographies (US, Europe and Asia) who can offer Cyan a channel to market, and/or complementary technology. Negotiations will be concluded during the first half of 2008,” said Lamb.