Starcom plunges as change in accounting policy means results will miss expectations

Shares in Starcom fell over 8% on Wednesday, after the technology group warned that a change in accounting policy will lead to its annual results coming in below market expectations.The Jersey-based group said it will no longer recognise revenue in respect of "bill and hold" sale prior to the delivery of goods, even though it added it was able to meet all the requirements for this kind of revenue recognition.However, the change in accounting policy means $4.8m (£3.2m) in "bill and hold" agreements will not be recognised in the company's annual results for 2014, which will therefore fall short of expectations.Had the sales been included, the group would have recorded revenue of $9.5m, while it currently expects revenue to total $4.7m, a 47.7% decline year-on-year.Starcom said the change in policy was due to its experience with "bill and hold" sales which totalled $2.8m in 2013, when goods were produced against commitments from customers to receive delivery in 2014.Ahead of delivery, the group said it had expected the items to be drawn during 2014 but the level of drawdowns was smaller than expected.The London-listed company said it expected the "bill and hold" deals for the last two years to be recognised as sales in 2015, which would lead to much improved revenue compared to 2014.Starcom shares were down 8.06% at 7.70p to 10:00 on Wednesday.