Trading Statement

RNS Number : 2250X

Touchstar PLC

18 December 2019

 

Touchstar plc

(the "Company", "Touchstar" or the "Group")

Trading Update

The Board of Touchstar plc provides the following update on trading and outlook:

FULL YEAR OUTLOOK

Total group revenue is expected to be around £7million, which is below where we had hoped but represents growth from continuing businesses, excluding the recently disposed On-Board division, of approximately 10% year on year.

Two factors have negatively impacted our performance. Firstly, there has been a general trend during this final quarter of the year of customers not committing to placing orders due to the political uncertainty in the UK. Secondly there was a negative factor specific to our business.  Whilst we received several large orders, including one which was highly significant, the race for delivery prior to the year-end has been impacted by extended lead times for obtaining stock.  Thus, delivery of these items will now be completed in the first quarter 2020.

These factors will have a knock-on effect to profitability in the current financial year. At both an after tax and pre-tax level performance is expected to be below prior expectations.

Set against this, cash generation in the second half of 2019 has been positive, with the group moving into a net cash position.

As a result of these stock delivery issues, the order bank for 2020 is exceedingly healthy at around £800k (compared to £254k at 31^st December 2018).

As regards our underlying operational performance, the newly developed products continued to grow and are expected to show strong revenue growth on 2018 - Podstar Haulage around 86% , Podstar Fuel around 13% , and Access Control around 10% - we expect these trends to continue. With the level of political distraction now reduced, it is probable that the  trading in our most economically sensitive part of the business, namely Logistics, will stabilise and recover, rather than record a 20% decline as is expected this year (as customers deferred their investment decisions).

The recent disposal of our On-Board division, consequential cost savings, a strong order book and positive reactions to our new products auger well for 2020.

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) ("MAR") prior to its release as part of this announcement and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For further information, please contact:

Touchstar plc	Ian Martin Mark Hardy	0161 874 5050 0161 874 5050
WH Ireland - Nominated Adviser	Mike Coe/ Chris Savidge	0117 945 3472

 

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