Strat Aero dives after pulling out of USA

Aerospace company Strat Aero posted half year results on Tuesday showing revenue grew by more than a third to help slash operating losses, but announced it was pulling out of North America.

However, the AIM-listed company said the "crowded and relatively immature" US market was too difficult to compete successfully and so it has laid off all of its US employees except two who were set to become independent contractors who will help out on the group's contracts with Millionair and Readyjet.

Revenue increased 38% to $568,553 in the six months leading up to 30 June, as the AIM-listed company looked to generate recurrent revenue streams by capitalising on its partnership with London based engineering firm CH2M.

While still in the red, the group focused on the unmanned aerial vehicle sector halved operating losses to $910,222 from $2.09m a year ago thanks in part to successful renegotiation of its short-term loan facility with Farina Investments.

Cash balances rose to $371,896 at the period-end from $275,428 six months before and losses per share were cut from 1.20 cents to just 0.07 cents.

Assets also soared from $173,875 on 30 June 2016 to $786,965 in 2017 at the same time as keeping the firm debt free.

Chief executive Iain McLure said, "The continued implementation of a robust strategy and rationalised cost base has delivered a clear improvement in Strat Aero's performance in the first six months of the year. I am pleased to report that all indications point towards this trend continuing in the coming months."

On the USA, he said a detailed review had concluded that "it is difficult for us to compete successfully and profitably in a crowded and relatively immature market at this time".

As of 1250 BST, shares had dropped 10.06% to 0.0742p.