Starcom swings to a FY loss as both margins and revenues contract

Asset tracking solutions provider Starcom said on Wednesday that it had swung to a loss in 2020 as both margins and revenues contracted during the year.

Reflecting the global impact of Covid-19 on the group, Starcom said preliminary unaudited accounts for 2020 showed revenues of approximately $5.0m, down from $6.8m, a gross margin of 33%, down from 41%, and an adjusted underlying loss of approximately $350,000 - a marked turnaround from the profit of $296,000 reported a year earlier.

Despite the loss, Stardom said it was "encouraging" to see that it could still rely on its "strong and loyal customer base" to generate $2.2m of software-as-a-service revenues, an increase of approximately 9% year-on-year.

The AIM-listed group added that it was hoping to benefit from new opportunities that the global vaccination effort presented within the logistics industry, most significantly, the need to monitor the temperature and other conditions of vaccines whilst in transit and stated it was already involved in discussions with two potential customers who provide vaccine logistics services.

Chief executive Avi Hartmann said: "We have adjusted our costs quickly, secured financial resources to ensure business continuity, and in parallel, focused on retaining our key assets, mainly our solid client base and pipeline of future opportunities.

"I remain optimistic about Starcom's ability to return to growth as the market returns to normality."

As of 0900 GMT, Starcom shares were up 5.0% at 0.94p.