(Alliance News) - Remote Monitored Systems PLC on Friday reported a sharply widened interim loss following contract troubles with its Geocurve unit.
In the six months to June 30, the data collection and surveying firm's pretax loss nearly doubled year on year, rising to GBP821,312 from GBP495,703.
Revenue halved in the period to GBP261,854 from a restated GBP460,330 the year before.
In March, the company said its Geocurve Ltd unit suffered a slower start than anticipated in 2019 due to a UK Environment Agency programme.
Geocurve, which provides survey and inspection services to blue-chip firms and government agencies, experienced a subdued 2019 as it needed to "dedicate more resources than expected to the Environment Agency's Thames Estuary Asset Management 2100 programme" which caused delays.
Remote Monitored Systems said it reviewed the contract, resulting in the departure of the managing director, and found Geocurve had overstated its 2018 interim revenue by GBP140,000.
The allocation of work to the contract has hurt Geocurve's ability to undertake other work, resulting in the sharp decline in revenue. As a result, the unit reduced its head count to 8 from 14 during the half.
"Although the difficulties identified at Geocurve earlier in the year were disappointing, we have taken decisive action to resolve these, with the backlog on the Thames contract eliminated, costs reduced, and Geocurve returned to operating profitability in June," Chief Executive Trevor Brown said.
Brown continued: "GyroMetric, whilst continuing to focus on significant opportunities in the wind sector, has made excellent progress in identifying new customers in industrial sectors with shorter lead times, in addition to continuing to deliver new orders in the marine market."
Remote Monitored Systems holds a 58% interest in digital monitoring and safeguarding firm GyroMetric. The unit did not generate any revenue in the half.
Separately on Friday, Remote Monitored Systems said it acquired peer Cloudveil Ltd for GBP130,000 in an all-share deal.
Remote will issue 22.2 million shares at 0.5845 pence each as consideration for the acquisition, equivalent to GBP130,000 in total.
Shares in Remote were 4.4% lower at 0.55 pence in London on Friday, giving it a market capitalisation of GBP2.3 million.
"The board has continued to seek relevant acquisition opportunities to create shareholder value and extend the application of our existing technologies to adjacent relevant areas," Remote Executive Director Trevor Brown said. "The acquisition of Cloudveil meets these aims perfectly."
During the nine months ended August, Cloudveil generated GBP47,400 in pretax profit. No revenue or full year figures were provided. In 2018, Remote generated GBP1.1 million pretax loss on revenue of GBP857,970.
After admission of the consideration shares - expected next Wednesday - Remote will have 429.7 million shares outstanding.
By Ahren Lester; ahrenlester@alliancenews.com and Paul McGowan; paulmcgowan@alliancenews.com
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