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(Alliance News) - Starcom PLC on Monday said it expects to swing to profit in its annual results as revenue increased and gross margin remained stable.
The stock was trading 11% higher at 1.27 pence each on Monday morning in London.
Starcom, which provides wireless solutions for remote tracking and monitoring of assets and people, said 2019 results were in line with market expectations.
Revenue increased 14% to USD6.8 million from USD6.0 million in 2018. Adjusted earnings before interest, tax, depreciation and amortization are expected to be around USD300,000, swinging from a loss of USD8,000 the year prior. Gross margin remained stable at 41% compared to 40% for 2018.
Starcom said that during the year, it strengthened its product offering and therefore, created the opportunity for faster growth.
It said that demand for its intelligent padlock product Lokies grew, adding that it has recently signed an agreement with a Russian distributor who has ordered an additional 500 units. The company said that although there are no binding purchase commitments, it is targeting the delivery of up to USD2 million worth of Lokies in 2020.
Industry certification of its cargo tracking product Kylos Air from airlines will allow it to be used in the air cargo market, resulting in an increase in sales. Starcom added that Cubemonk Inc has placed its first orders of Kylos units, and the two companies are in discussions regarding a long-term agreement for larger future orders.
Looking ahead, Starcom said it will build on its collaborations with companies such as Zero Motorcycles Inc, Israel Chemicals Ltd and WIMC Solutions Inc.
In December, Starcom said it is collaborating with motorcycle manufacturer Zero Motorcycles to integrate the Helios technology into their electric motorcycles. The Helios units, equipped with Bluetooth and CANBUS connections, connect with a vehicle's computer to analyse a variety of vehicle and driver behaviour data.
WIMC Solutions in December, placed a large order for an undisclosed amount with Starcom for its Tetis shipping container tracking device. Tetis is a device that monitors and tracks containers, regularly gathering accurate records of temperature, humidity and light and provides both real-time and after the fact report of the containers.
Israel Chemicals Ltd uses Starcom's Kylos Forever technology to track and monitor its sensitive cargo as it is shipped in tanks around the world. Israel Chemicals develops, produces and markets fertilizers, metals and other special-purpose chemical products.
"We are pleased that the 2019 year-end financials are on target and reflect an upward trend, with revenue growth and positive adjusted EBITDA. We are delighted to see that the changes in our product offering, which we have worked so hard on over the last three years, are now coming to fruition and we believe this will result in accelerated growth in 2020 and beyond," said Starcom Chief Executive Avi Hartmann.
By Ife Taiwo; ifetaiwo@alliancenews.com
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