PhotonStar's H1 revenue falls and pre-tax loss widens

However, management sounded an optimistic note on the outlook for further "material" roll-out of its Internet-of-Things Halcyon solution over the coming months, following paid-for trials "across numerous sites in many locations".

For the six months ended 30 June, revenues decreased by 22% to £2.53m, compared to the same period last year, with gross profit margin at 33% lower as well.

Pre-tax loss increased by 54% to £910,000 and loss per share for the half year stayed flat at 0.4p each. Unused aggregate tax losses were about £9m.

Administrative expenses at the smart LED designer and manufacturer fell by 4% to £1.76m, due to downsizing over the past two years, and a tight control on costs, while the company maintained investment in research and development.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) loss increased to £540,000 from £200,000.

Net debt increased slightly by 1.4% to £680,000.

In March, the company raised £1m of capital from shareholders to expand the Halcyon software and service offering.

During the latest six-month stretch, the company restructured the company to become a retrofit connected and lighting business and established a new Halcyon internet of things team to deliver solutions to customers, which resulted in a “leaner organisation” and annualised cost savings on overheads of about £500,000.

The AIM listed company also secured its first phase two Halcyon order from an NHS hospital in the north of England, following a successful three month on-site trial.

Capital expenditure rose by about 20% to £590,000, related to the company buying the latest equipment for contract manufacturing, and continuing investment in product development and the patent portfolio, in particular the Halcyon lighting systems.

Chief executive James McKenzie, said: “The traditional lighting business continues to be affected by significant competitor price reductions, resulting in a decline in revenues and increased pressure on profit margins.

“We have restructured the group in order for this area of the business to be profitable at the lower revenue levels now experienced and to better deliver upon the growth opportunities afforded by Halcyon internet of things projects and paid for trials which we hope will lead to the roll out of significant new contracts.”

He added that technical demonstrations of halcyonPRO2 and cloudBMS products at IBM InterConnect 2016, a cloud mobile phone conference, pointed the way to future growth for the company.