RNS boooo30 Jul 2018 09:19
RNS Number : 0862W
Starcom PLC
30 July 2018
30 July 2018
Starcom Plc
("Starcom" or the "Company")
Trading Update
Starcom (AIM: STAR) which specialises in the development of wireless solutions for the remote tracking, monitoring and protection of a variety of assets, is pleased to provide an update with regards to the results for the six months ended 30 June 2018.
The preliminary draft of the unaudited accounts shows an increase of over 50% in first half revenues compared with the same period last year. Revenues for the period are expected to be around $3 million (H1 2017: $1.92 million).
Gross margin is expected to be 39% (2017: FY 38%, H1 47%) due to the still dominant proportion of the low margin Helios product in the sale mix in the first four months. This mix has improved since then, resulting in higher gross margins. Moving towards the higher margin products is our main focus going forward.
EBITDA for the first six months of the year is expected to show a loss (before options provisions) of less than $100,000, a significant improvement over the previous year (2017 FY: loss of $193,000, H1 2017: loss of $283,000).
The increase in revenues results from our intensified efforts to acquire larger, more strategic and world class clients who need our advanced and flexible technology to resolve the unique mission-critical problems they face in their respective businesses. This is also how an improvement in margins will develop going forward. In the first six months of 2018, two such clients, mentioned in our previous reports, contributed most of the $1m first half revenue increase: CropX (irrigation-agricultural control) and WIMC (insurance - cargo tracking).
Good progress is being made with other strategic clients:
· We have delivered the first order for the major European industrial group with whom we have a collaboration agreement, as well as the modifications and adjustments they subsequently requested. We expect as a result of this to see further orders during the second half of 2018. We have obtained their agreement to disclose their details within the upcoming financial report.
· Good progress has been made with regards to the electric motor bike company, where our technology will be integrated during manufacturing - an initial order has been received for delivery this year, with more expected to follow during 2019 and 2020.
· After some delay caused by internal changes, Xplosive Solutions in South Africa is in the final stages of development with its customer to produce a collar for the protection and tracking of livestock in South Africa and Australia. We expect to receive initial orders for units later this year.
· Work is being done with one of the largest suppliers of management and control systems for concrete production factories. Integrating Starcom's technology with its system will meet the challenge of monitoring and bet
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