LONDON (Alliance News) - Starcom PLC Friday reported a narrowed loss in the first half of 2015 as it cut down on costs and operating expenses, but said that revenue remained flat while its gross margin declined on tougher price competition.
The developer of wireless services and products said that its pretax loss in the six months ended June 30 narrowed to USD691,000 from USD985,000 in the first half of 2014, as it implemented cost-cutting measures including saving USD130,000 in operating expenses. It said it expects to save a further USD400,000 in the second half of the year.
Revenue, however, remained flat at USD2.6 million as the company said it has ceased to recognise revenue from bill and hold contracts until actual orders are shipped. Gross margin fell to 44% from 48%, which Starcom said was due to a increase in high margin software revenue being offset by tougher price competition in the Helios car tracking market.
"Based on the very positive market reception the new products have attracted as they are being presented to potential clients and distributors, the board believes that the shifting of the emphasis to the less price-sensitive but still very large market segments for which the new products are designed will bring about over time the desired growth in revenue and the return to profitability," Starcom said in a statement.
"The company is therefore intensifying its efforts in order to increase distribution channels for the new products. A number of marketing initiatives that are under way should begin to impact on sales in the second half of the year," the company added.
Shares in Starcom were untraded Friday morning, last trading at 3.51 pence.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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Star Energy (STAR)