TIDMSTAR
RNS Number : 0862W
Starcom PLC
30 July 2018
30 July 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
with regards to the results for the six months ended 30 June
2018.
The preliminary draft of the unaudited accounts shows an
increase of over 50% in first half revenues compared with the same
period last year. Revenues for the period are expected to be around
$3 million (H1 2017: $1.92 million).
Gross margin is expected to be 39% (2017: FY 38%, H1 47%) due to
the still dominant proportion of the low margin Helios product in
the sale mix in the first four months. This mix has improved since
then, resulting in higher gross margins. Moving towards the higher
margin products is our main focus going forward.
EBITDA for the first six months of the year is expected to show
a loss (before options provisions) of less than $100,000, a
significant improvement over the previous year (2017 FY: loss of
$193,000, H1 2017: loss of $283,000).
The increase in revenues results from our intensified efforts to
acquire larger, more strategic and world class clients who need our
advanced and flexible technology to resolve the unique
mission-critical problems they face in their respective businesses.
This is also how an improvement in margins will develop going
forward. In the first six months of 2018, two such clients,
mentioned in our previous reports, contributed most of the $1m
first half revenue increase: CropX (irrigation-agricultural
control) and WIMC (insurance - cargo tracking).
Good progress is being made with other strategic clients:
-- We have delivered the first order for the major European
industrial group with whom we have a collaboration agreement, as
well as the modifications and adjustments they subsequently
requested. We expect as a result of this to see further orders
during the second half of 2018. We have obtained their agreement to
disclose their details within the upcoming financial report.
-- Good progress has been made with regards to the electric
motor bike company, where our technology will be integrated during
manufacturing - an initial order has been received for delivery
this year, with more expected to follow during 2019 and 2020.
-- After some delay caused by internal changes, Xplosive
Solutions in South Africa is in the final stages of development
with its customer to produce a collar for the protection and
tracking of livestock in South Africa and Australia. We expect to
receive initial orders for units later this year.
-- Work is being done with one of the largest suppliers of
management and control systems for concrete production factories.
Integrating Starcom's technology with its system will meet the
challenge of monitoring and better assuring the quality of concrete
during its journey from the factory to the construction sites.
-- A new opportunity in Kenya, where all vehicles will soon be
required to have telematic devices fitted, has been presented to
the Company. We are incorporating our technology inside a portable
handheld printer which will be used by local police to inspect
suspicious vehicles. The printer links up to the vehicle's
telematic system to download a record of the vehicle's movements.
Orders are expected to be received during the second half of
2018.
The Watchlock Cube was launched in the second quarter of 2018
and has been well received in the market. So far, we have sold 500
units at a good margin, with further orders expected. The Company
continues its efforts to develop its unique and innovative
Watchlock Bluetooth, which is already supported by orders of
approximately $250,000, conditional on satisfactory delivery. This
new product is expected to be ready by the final quarter of
2018.
Overall, the level of activity is extremely high and we are now
entering a number of new areas for our technology as well as
constantly exploring other new opportunities. Some will take longer
to mature but others, including some of those described above, are
already contributing to revenues. Meanwhile, our regular clients
continue to place repeat orders for our range of products. As a
result, we remain confident that we will significantly improve on
the level of revenues and gross margin this year compared to last
year and that EBITDA for the year will turn positive.
It is expected that the Interim Results will be released in the
week commencing 27 August 2018.
Michael Rosenberg, Chairman of Starcom, commented, "For the
first time in our history we are beginning to see a truly global
opportunity for Starcom. We are receiving a record number of
enquires for our unique tracking systems from significant
multi-national businesses and organisations, including the major
European industrial group. We are becoming the 'go to' company to
provide specialised solutions in areas which, to date, have never
had the technical knowhow to deploy tracking and monitoring
products, such as air cargo, livestock tracking and crop moisture
level monitoring.
"Our flexibility and many years of experience in this market is
allowing us to innovate to new levels, developing specific
monitoring systems which our clients can deploy to create
opportunities otherwise unheard of. We foresee this strategy
continuing as our reputation grows in the industry."
This announcement contains inside information.
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
Matthew Johnson / Edward Hutton (Corporate Finance)
Rob Rees (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
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END
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