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LONDON (Alliance News) - Wireless services company Starcom PLC reported a wider loss and lower revenue for 2014 on Friday, following through on a warning it issued last month that its results for the year would take a hit from a change to its accounting policy.
Starcom said its pretax loss for the year was USD2.8 million, compared to a USD1.9 million loss a year earlier. Its operating loss for the year was USD2.7 million, against USD892,000, with revenue falling to USD5 million from USD9 million a year earlier. The company said its revenue for 2014 restated to reflect the accounting change would have been USD5.8 million.
The fall in revenue was due to a change the group announced in April, when it said it would no longer recognise revenue in respect of "bill and hold" sales prior to the delivery of goods, though the company said it is able to satisfy the relevant criteria for this type of revenue recognition.
Announcing the change, the group said it expected revenue for the year to be around USD4.7 million, meaning the revenue reported on Friday is slightly ahead of those revised expectations. Without the change in accounting policy, however, the company estimated in April it would have posted revenue of USD9.5 million.
Starcom said trading in the first quarter of 2015 has been slow, but it expects revenue for the year to exceed 2014 based on the level of enquiries seen so far. Cash flow for the group has been hit by an increase in inventory levels incurred in 2014 in anticipation of bill and hold contracts, though the company also expects this to improve over the course of 2015.
Shares in Starcom were down 1.3% to 5.8 pence on Friday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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