LightwaveRF anticipating bigger loss as it undergoes restructure

Smart home solutions provider LightwaveRF updated the market on its trading for the six months ended 31 March on Monday, reporting that it expected first half revenue to be broadly in line with the prior year, which was £1.2m, with gross margin increasing to over 40% from 39.4%.

The AIM-traded firm added that, as it announced last month, it had made a “fundamental change” to its distribution strategy, moving away from two exclusive partners which it decided was curtailing sales growth, to pursue a range of non-exclusive relationships.

It said that shift in strategy had already seen revenues more directly reflect actual sell-through volumes, with an increase in regular smaller orders rather than large distributor stocking orders.

Although first half revenue was held back by the significant restructuring, the company said it anticipated “much stronger” revenue growth in the future.

“The completion of the last stage of the £5.25m fundraising in December marked the start of the process to significantly scale the business,” the board said in its statement.

“As anticipated, the accelerated investment in research and development, marketing and sales will have significantly increased administrative expenses over the same period last year.

“As a result, the company expects losses before tax for the six months ended 31 March to be markedly higher than those reported in the first half last year (2017: loss of £0.33m).”

The company said it would provide a further update when it issued its interim results for the six months, which it expected to release in May.