Polartechnics CEO wants profits this year

After a turbulent year, Sydney-based Polartechnics (ASX:PLT) has seen a threefold increase in sales revenue for the 2004-05 financial year and is aiming to be profitable in the current year.

While the company's net loss increased 38 per cent from $6.1 million in 2003-04 to $8.4 million in 2004-05, Polartechnics CEO Victor Skladnev said that approximately $1 million was due to write-off associated with new accounting rules, providing "a chance to tidy up the books", as well as costs associated with the extraordinary general meeting called by the company's previous chairman Richard Opara.

"To my mind, without those extraordinary events, our sales went up, our losses stayed about the same," said Skladnev.

Skladnev said that sales across the board for Polartechnics' products drove revenues. In particular, sales for the company's hair reduction and skin treatment system Energist Ultra improved substantially and its skin cancer diagnostic system SolarScan and medical imaging and monitoring system MediScan also did well.

Skladnev said his first job as CEO was to drive sales. The company's sales revenue has increased from $0.5 million in 2003-04, to $2.1 million in 2003-04, and $6.0 million in 2004-05. "This represents 1200 per cent in two years, which is not bad," Skladnev said. "The focus for the first two years was to drive revenues, the third year was to get to profitable. So we're very focused on getting profitable in the next period."

Polartechnics had $1.7 million in cash at June 30, 2005 down from $7.7 million in the previous year.

Skladnev said that while a capital raising has been flagged for the next year, he has been reducing the company's monthly burn rate by retrenching a lot of the company's scientists and putting on sales people. "We're now starting to see the benefits," he said -- the company's cash burn has dropped from between $700,000 - $900,000 a month a year ago to a figure closer to $200,000 now.

"It's always tempting with an R&D group to keep doing R&D but we felt our shareholders needed to see some return," said Skladnev.

Skladnev said that as Polartechnics' products have evolved, the company has moved from being a technology group to focus more on marketing and manufacturing.

Asked about Opara's failed attempt to reinstate himself and Leonard Firestone as directors at a Polartechnics' EGM held in August, Skladnev said it was a "very disappointing distraction".

"I don't think it helped anyone, including Opara," he said. "I think there is still potential there for more disruption, which is disappointing."