Starcom PLC Trading Update (1980C)
18 January 2018 - 6:00PM
UK Regulatory
TIDMSTAR
RNS Number : 1980C
Starcom PLC
18 January 2018
18 January 2018
Starcom Plc
("Starcom" or the "Company")
Trading Update
Starcom (AIM: STAR), which specialises in the development of
wireless solutions for the remote tracking, monitoring and
protection of a variety of assets, is pleased to provide an update
in respect of the results for the year ended 31 December 2017,
which are subject to final audit.
The Board expects turnover for the year ended 31 December 2017
of not less than $5.5m (2016: $5.1m) and that the gross margin will
exceed 41% (2016: 28%). EBITDA is expected to show a positive
result of not less than $500,000 (2016: $612,000 loss). Total
operating expenses in 2017 are expected to be 31% lower than in
2016 and, as a result, it is anticipated that the consolidated net
profit after tax will show a breakeven position or a small loss
(2016: loss of $2m).
The Board notes that the mix of sales in 2017 has shown a good
progression in the sales of non-Helios products such as the Tetis,
Kylos and Watchlock. These are more specialised products and
therefore command higher gross margins than the standard Helios
products. The demand for the non-Helios products at these higher
margins has continued into the first half of 2018.
Discussions are ongoing concerning further orders during 2018
with the major European Industrial group with whom the Company
announced an initial contract in September 2017 for 1,000 Kylos Air
units (subsequently increased to 1,200 units). These units are
expected to be delivered to the customer shortly.
The agreement with CropX is also proceeding well and further
orders have been received for delivery in the first quarter of
2018.
The Company has recently signed a three-year supply and support
Tetis agreement with WIMC Solutions Inc. ("WIMC"), a US-based
provider of products and services for real-time monitoring of
international container movements. WIMC founded
'whereismycargo.net' a website which provides online global
tracking of vessels and containers for its customers. An initial
order of 1,000 units has already been received and this may be
increased to around 20,000 units over the next three years. A
further 1,000 units are expected to be delivered in Q1 of this
year. This agreement, if fully implemented and all units are
connected, has the potential value of approximately $4.5 million,
including SAS revenues, over three years.
The tender process involving the UN project referred to last
year included a pilot scheme in Africa and in the USA. This pilot
was completed satisfactorily at the end of December 2017 and all
customer requirements have been met. However, it is still uncertain
as to when a final decision will be made and there can be no
assurance at this stage that Starcom's proposal will be
selected.
The Company has a number of outstanding bank and commercial
loans and is reducing these on a monthly basis. Since the placing
of shares in October 2017, a total of $175,000 has been repaid,
including $55,000 to YA II PN, Ltd ("YA"). The outstanding balance
of $65,000 due to YA will be repaid in the near future. Although
the intention had been to repay this loan in full in the last
quarter of 2017, it was considered that it was in shareholders'
interests that customer demands for delivery of product should take
priority at that time.
The Company is experiencing one of its highest levels of orders
for delivery in the first half of the year. Although the 2018
financial year is at a relatively early stage, based on the level
of orders in hand and the level of new business enquiries, the
Board anticipates that revenues and margins in 2018 will continue
to improve.
The preliminary results announcement is expected to be released
by the middle of March 2018.
-ends-
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information, please contact:
Starcom Plc
Michael Rosenberg, Chairman 07785 727 595
Avi Hartmann, CEO +972 5447 35663
Northland Capital Partners Limited (Nominated Adviser and Broker) 020 3861 6625
Edward Hutton / David Hignell (Corporate Finance)
John Howes (Sales and Broking)
Peterhouse Corporate Finance (Joint Broker) 020 7469 0930
Lucy Williams / Charles Goodfellow / Eran Zucker
Leander PR (Financial PR) 07795 168 157
Christian Taylor-Wilkinson
This information is provided by RNS
The company news service from the London Stock Exchange
END
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