TIDMSTAR
RNS Number : 6377W
Starcom PLC
20 August 2020
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information for the purposes of Article 7 under the Market Abuse
Regulation (EU) No. 596/2014 ("MAR"). With the publication of this
announcement, this information is now considered to be in the
public domain.
20 August 2020
Starcom Plc
("Starcom" or the "Company")
Interim Results
Starcom (AIM: STAR), which specialises in the development of
wireless, Internet-Of-Things (IoT) based solutions for the remote
tracking, monitoring and protection of a variety of assets,
announces its results for the six months ended 30 June 2020.
Highlights
-- Revenues decreased by 25% to $2.3m (H1 2019: $3.1m (
-- Recurring SaaS revenues increased by 16% to $1.0m (H1 2019: $0.9m (
-- Adjusted EBITDA loss of $167,000 (H1 2019: profit of $75,000)
-- Gross margin for the period was 33% (H1 2019:41%)
-- Cost reductions and a new bank facility providing financial
stability through this uncertain period
-- Positive signs for improvement in H2 2020
-- Re-engagement with certain clients in Russia and US
Avi Hartmann, CEO of Starcom, commented:
"Although these results are below our original expectations , we
are pleased to have been able to deliver in excess of $2 million of
revenues in a period when the impact of COVID-19 created an
unprecedented situation from March onwards, with many of our
clients in complete shutdown. Notwithstanding this, we have managed
to stabilise the business by maintaining engagement with customers,
ensuring that we are able to support both existing customers, and
are prepared to respond to both new opportunities and projects that
recommence, as and when business conditions improve."
For further information:
Starcom Plc
Michael Rosenberg, Chairman 07785 727595
Avi Hartmann, CEO +972 5477 35663
Allenby Capital Limited (Nominated Adviser
and Joint Broker)
Jeremy Porter/Asha Chotai 020 3328 5656
Peterhouse Capital Limited (Joint Broker)
Lucy Williams/Charles Goodfellow/Eran Zucker 020 7469 0930
Leander PR (Financial PR)
Christian Taylor-Wilkinson 07795 168 157
CHAIRMAN'S STATEMENT
The results for the first half of 2020 reflect the impact of
COVID-19 on the business. Sales dropped by 25% in the period, to
$2.34m (H1 2019: $3.1m), EBITDA showed a loss of $167,000 (H1 2019:
profit of $75,000) and gross margins decreased to 33% (due to
higher logistics and shipment costs).
At the beginning of the year, our expectations for 2020 were to
comfortably beat 2019's results, based on a strong pipeline of firm
and prospective orders that had been built and the launch of the
new product , Lokies. However, the positive early momentum was
abruptly halted by the pandemic. From March 2020 onwards many of
our customers were locked down and consequently were unable place
orders as expected.
Drastic cost reduction measures were subsequently taken to
ensure that the Company's costs were aligned with the lower level
of activity and to maintain a stable cash position. Shortly after
the period end, an enlarged bank facility was secured to enable the
Company to withdraw up to NIS 5 million (approx. $1.4 million) as
needed, subject to certain conditions, giving the Company
sufficient headroom and confidence during this difficult period,
and enabling the Company to come out of it ready for the future.
The Company has focused on maintaining customer relationships, with
the majority of customer projects being placed on hold as opposed
to being cancelled. It is hoped that these projects will be resumed
once conditions return to normal.
It was very encouraging to see that despite the challenges the
Company has faced during the COVID-19 pandemic, the SaaS revenues
continued the positive trend and increased by 16% compared to same
period in 2019. This indicates the Company has strong relationships
with its customers, who remain loyal to the Company's services.
The Company has used this period to increase the technological
developments to its existing product portfolio in order to meet the
requirements of new markets. Starcom has continued to strengthen
and upgrade the on-line infrastructure supporting the tracking
systems and has focused on development of new products, including a
new premium Helios unit.
FINANCIAL REVIEW
Group revenues for the period were $2.34m, compared with $3.1m
for six months ended 30 June 2019.
Recurring SaaS revenues improved to $1.0m (H1 2019 $0.9m)
The gross margin for the period was 33%, compared with 41% for
the equivalent period in 2019. The impact of amortization costs (
referred to in Note 7 to the financial statements, below), along
with lower revenues and extra shipping costs due to the new
circumstances arising from COVID-19, resulted in an erosion of the
Company's gross margin.
Total operating expenditure decreased by 9% to $1.48m (H1 2019:
$1.6m), mainly due emergency cost cutting measures implemented by
the management since the beginning of the COVID-19 pandemic .
The Group balance sheet showed decrease in trade receivables to
$1.7m, compared with $2.0m as at 31 December 2019 (H1 2019:
$1.57m), due to decrease in revenues for the reported period.
Group inventories at the period end were $2.3m, the same as at
31 December 2019.
Trade payables were $1.9m, compared with $2.1m as at 31 December
2019.
Net cash used in operating activities in the period was positive
$46,000 compared with $ nil for the year ended 31 December 2019 (H1
2019: $13 ,000). As at the period end, the Company had cash and
cash equivalents of $278, 000 (30 June 2019: $416 ,000).
OUTLOOK
As a result of the measures taken, including reducing costs and
securing additional financing, the Board is confident that the
Company is in a stable financial position and well placed to return
to growth once lockdown restrictions are eased and trading
conditions return to previously seen levels. This should include a
return to the previously achieved gross margins levels as the
Company's product shipment costs and logistics return to normal and
as the product mix continues to migrate towards the higher margin
IoT products. It is anticipated that the second half of this year
should show an improvement on first half results assuming there is
no second wave and reintroduction of severe lockdown measures in
the key markets we serve. However, the full return to growth is
expected to be delayed until 2021 , assuming more normal conditions
return.
The innovative Lokies product is expected to be one of the key
growth areas for the Company in the coming years . The agreement
and the purchasing plan provided by the Russian distributor signed
up in 2019 underpins this assessment, although this has been placed
on hold until recently due to COVID-19 restrictions. Also
encouraging is the three-year OEM contract recently signed with
Cubemonk for the incorporation of our Kylos Air unit into their
product. Zero Motorcycles is progressing with its own sales of
Starcom-integrated motorbikes which may encourage other similar
manufacturers to follow.
There are also new opportunities being identified and progressed
during this uncertain period. For example, a new three-year
agreement has been recently reached with HaZeaka, a long-term
customer of Starcom, for the provision of a new Kylos unit, the
"Connect", an innovative solution for motorcycle protection that
prevents thieves from jamming and disrupting the cellular tracking
signal sent from motorcycles to their owners. The product is
currently going through customer testing ahead of orders being
placed and we look forward to updating the market further on the
progress with this agreement in due course .
The Board believes that its global client base, its advanced
technology, strong product offering, recurring SaaS revenues and
the substantial sales pipeline that has been built, provide a sound
foundation for the Company to grow and develop in the post Covid-19
market.
Michael Rosenberg
Non Executive Chairman
Starcom Plc
STARCOM Plc
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
U.S. Dollars in thousands
June 30 December
31
Note 2020 2019 2019
--------- --------- --------
Unaudited Unaudited Audited
--------- --------- --------
ASSETS
NON-CURRENT ASSETS :
Property, plant and equipment, net 3 50 460 378
Rights of use assets, net 208 298 228
Intangible assets, net 31,976 2,169 2,119
Income tax authorities 56 49 54
Total Non-Current Assets 2,590 2,976 2,779
----- ----- -----
CURRENT ASSETS :
Inventories 2,348 2,287 2,346
Trade receivables (net of allowance
for doubtful accounts of $89, $14
and $59 thousand as of June 30, 2020
and 2019 and December 31,2019) 1,715 1,568 1,986
Other receivables 68 195 169
Short-term deposit 67 55 61
Cash and cash equivalents 278 461 158
Total Current Assets 4,476 4,566 4,720
----- ----- -----
TOTAL ASSETS 7,066 7,542 7,499
===== ===== =====
LIABILITIES AND EQUITY
EQUITY
3,418 4,245 3,891
----- --------------- -----
NON- CURRENT LIABILITIES:
Long-term loans from banks, net of
current maturities 123 34 167
Amortized cost of a convertible loan 5 249
Conversion component of a convertible
loan at fair value 5 57 - -
Leasehold liabilities 96 173 115
----- --------------- -----
Total Non-Current Liabilities 525 207 282
CURRENT LIABILITIES:
Short-term bank credit 85 68 79
Short-term loans and current maturities
of long-term loans 137 333 136
Warrants at fair value 5 11 - -
Trade payables 1,888 1,751 2,081
Shareholders and related parties 6 561 664 668
Other payables 307 136 227
Leasehold liabilities 134 138 135
Total Current Liabilities 3,123 3,090 3,326
----- --------------- -----
TOTAL LIABILITIES AND EQUITY 7,066 7,542 7,499
===== =============== =====
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
STARCOM Plc
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
U.S. Dollars in thousands
Year Ended
Six Months Ended June December
30 31
Note 2020 2019 2019
----------- ---------- ----------
Unaudited Unaudited Audited
----------- ---------- ----------
Revenues 2,340 3,110 6,817
Cost of sales 7 (1,557) (1,844) (4,019)
-----------
Gross profit 783 1,266 2,798
Operating expenses:
Research and development, net (71) (81) (231)
Selling and marketing (292) (380) (776)
General and administrative (1,116) (1,168) (2,423)
Other income (expenses) 25 (11) (74)
----------- ---------- ----------
(1,454) (1,640) (3,504)
----------- ---------- ----------
Operating loss (671) (374) (706)
Net finance expenses 8 (45) (131) (313)
----------- ---------- ----------
Total comprehensive loss prior
to taxes (716) (505) (1,019)
Taxes on income due to previous
years - . - - . - - . -
----------- ---------- ----------
Total comprehensive loss for
the year (716) (505) (1,019)
=========== ========== ==========
Loss per share:
Basic and diluted loss per
share (in dollars) 4 (0.002) (0.002) (0.003)
=========== ========== ==========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
STARCOM Plc
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
U.S. Dollars in thousands
Capital
Share Reserve
Capital Premium Capital for Share-based Accumulated
* on Shares Reserve payment Loss Total
------------ ----------- -------- ----------------- ---------------- --------
(Unaudited)
Balance- January 1,
2020 - 12,254 89 942 (9,394) 3,891
Issue of share
capital,
net of expenses -
see
Note 4 - 73 - - - 73
Share based payment
- Note 4 - - - 170 - 170
Comprehensive loss
for the period - - - - (716) (716)
-----------------
Balance- June 30,
2020 - 12,327 89 1,112 (10,110) 3,418
============= =========== ======== ================= ================ ========
(Unaudited)
Balance- January 1,
2019 - 11,460 89 687 (8,375) 3,861
Issue of share
capital,
net of expenses - 794 - - - 794
Share based payment - - - 95 - 95
Comprehensive loss
for the period - - - - (505) (505)
-----------------
Balance- June 30,
2019 - 12,254 89 782 (8,880) 4,245
============= =========== ======== ================= ================ ========
(Audited)
Balance- January 1,
2019 - 11,460 89 687 (8,375) 3,861
Proceeds from
issued
share capital, net
of expenses - 794 - - - 794
Share based payment - - - 255 - 255
Comprehensive loss
for the year - - - - (1,019) (1,019)
-----------------
Balance- December
31,
2019 - 12,254 89 942 (9,394) 3,891
============= =========== ======== ================= ================ ========
* An amount less than one thousand.
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
STARCOM Plc
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. Dollars in thousands
Six Months Ended Year Ended
June 30 December
31
2020 2019 2019
--------- ---------- -----------------
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: Unaudited Unaudited Audited
--------- ---------- -----------------
Comprehensive loss (716) (505) (1,019)
Adjustments to reconcile net loss to
net cash provided by
(used in) operating activities:
Depreciation and amortization 360 329 673
Interest expense and exchange rate differences 39 5 (6)
Share-based payment expense 170 95 255
Capital loss - 15 51
Changes in assets and liabilities:
Increase in inventories (2) (262) (321)
Decrease (Increase) in trade receivables 271 329 (89)
Decrease (Increase) in other receivables 101 (108) (82)
Increase in Income Tax Authorities (2) (3) (8)
Increase (Decrease) in trade payables (193) 340 669
Increase (Decrease) in other payables 45 (222) (131)
Net cash provided by (used in) operating
activities 73 13 (8)
--------- ---------- -----------------
CASH FLOWS FOR INVESTING ACTIVITIES:
Purchases of property and equipment (12) (202) (220)
Proceeds from sales of property, plant
and equipment - 28 53
Decrease (Increase) in short-term deposits (6) 5 (1)
Purchase of intangible assets (103) (112) (297)
Net cash used in investing activities (121) (281) (465)
--------- ---------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term bank credit,
net 6 40 51
Repayment of Short-term loans from banks (189) (462)
Receipt of long-term loans - - 290
Receipt of Convertible loan 290 - -
Proceeds from (Repayment to) shareholders
and related parties, net (7) 83 87
Repayment of Leasehold liability (78) (58) (128)
Repayment of long-term loans (43) (16) (76)
Consideration from issue of shares - 780 780
--------- ---------- -----------------
Net cash provided by financing activities 168 640 542
--------- ---------- -----------------
Increase (Decrease) in cash and cash
equivalents 120 372 69
Cash and cash equivalents at the beginning
of the period 158 89 89
--------- ---------- -----------------
Cash and cash equivalents at the end
of the period 278 461 158
========= ========== =================
Appendix A - Additional Information
Interest paid during the period (26) (21) (30)
========= ========== =================
Appendix B - Non-cash financing activities
Issuance of shares to a related party
in payment of debt 75 14 15
=====
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 1 GENERAL INFORMATION
-
a. The Reporting Entity
1. Starcom Plc ("the Company") was incorporated in Jersey
on November 28, 2012.
The Group specializes in easy-to-use practical wireless solutions
that combine advanced technology, telecommunications and
digital data for the protection and management of people,
fleets of vehicles, containers and assets and engages in
production, marketing, distribution, research and development
of G.P.S. systems.
The Company fully owns Starcom G.P.S. Systems Ltd., an Israeli
company that engages in the same field, and Starcom Systems
Limited, a company in Jersey.
The Company's shares are admitted to trading on the London
Stock Exchange's AIM market.
Address of the official Company office in Israel of Starcom
G.P.S. Systems Ltd. is:
16 Hata'as St., Kfar-Saba, Israel.
Address of the Company's registered office in Jersey of Starcom
Systems Limited is:
Forum 4, Grenville Street, St Helier, Jersey, Channel Islands,
JE4 8TQ
b. Definitions in these financial statements:
1. International Financial Reporting Standards
(hereinafter:
"IFRS") - Standards and interpretations
adopted by the
International Accounting Standards Board
(hereafter: "IASB")
that include international financial
reporting standards
(IFRS) and international accounting standards
(IAS), with
the addition of interpretations to these
Standards as
determined by the International Financial
Reporting Interpretations
Committee (IFRIC) or interpretations
determined by the
Standards Interpretation Committee (SIC),
respectively.
2. The Company - Starcom Plc.
3. The subsidiaries - Starcom G.P.S. Systems
Ltd. And Starcom
Systems Limited.
4. Starcom Jersey - Starcom Systems Limited.
5. Starcom Israel - Starcom G.P.S. Systems Ltd.
6. The Group - Starcom Plc. and the
Subsidiaries.
7. Related party - As determined by
International Accounting
Standard No. 24 in regard to related parties.
NOTE 2 - BASIS OF PREPARATION AND CHANGE IN THE GROUP'S ACCOUNTING
POLICIES
a. Basis of preparation
The interim consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles for the preparation of financial statements
for interim periods, as prescribed in International Accounting
Standard No. 34 ("Interim Financial Reporting").
The interim consolidated financial information should
be read in conjunction with the annual financial statements
as of December 31, 2019 and for the year ended on that
date and with the notes thereto.
The significant accounting policies applied in the annual
financial statements of the Company as of December 31,
b. 2019 are applied consistently in these interim consolidated
financial statements.
Use of estimates and judgments
The preparation of financial statements in conformity
with IFRS requires management of the Company to make
judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
The judgment of management, when implementing the Group
accounting policies and the basic assumptions utilized
in the estimates that are bound up in uncertainties are
consistent with those that were utilized to prepare the
annual financial statements.
Information about critical judgment in applying accounting
policies that have a significant effect on the amounts
recognized in the consolidated financial statements is
included in the following Notes:
Note 5 - financial liabilities of convertible loans and
warrants.
c. Exchange rates:
Year Ended December
Six Months Ended 31
June 30
2020 2019 2019
------------- ------------ --------------------
Exchange rate of U.S.
$ in NIS 3.466 3.566 3.456
Exchange rate of U.S.
$ in GBP 0.81 0.79 0.76
Change of U.S. $ in NIS (0.29%) (4.86%) (7.8%)
Change of U.S. $ in GBP 6.5% 0.86% (2. 8 %)
NOTE 3 INTANGIBLE ASSETS, NET
-
Total
----------
Unaudited
----------
Cost:
Balance as of January
1, 2020 4,755
Additions during the period 103
Balance as of June 30,
2020 4,858
----------
Accumulated Depreciation:
Balance as of January
1, 2020 (2434)
Amortization during the
period (246)
Balance as of June 30,
2020 (2,680)
----------
Impairment of assets (202)
Net book value as of June
30, 2020 1,976
==========
Total
----------
Unaudited
----------
Cost:
Balance as of January
1, 2019 4,458
Additions during the period 112
Balance as of June 30,
2019 4,570
----------
Accumulated Depreciation
:
Balance as of January
1, 2019 (1,977)
Amortization during the
period (222)
Balance as of June 30,
2019 (2,199)
----------
Impairment of assets (202)
----------
Net book value as of June
30, 2019 2,169
==========
Total
--------
Audited
--------
Cost:
Balance as of January
1, 2019 4,458
Additions during the year 297
Balance as of December
31, 2019 4,755
--------
Accumulated Depreciation
:
Balance as of January
1, 2019 (1,977)
Amortization during the
year (457)
Balance as of December
31, 2019 (2,434)
--------
Impairment of assets (202)
--------
Net book value as of December
31, 2019 2,119
========
NOTE 4 SHARE CAPITAL
-
a. Composition - ordinary shares of no-par value, issued
and outstanding - 351,479,801 shares and 345,329,513
shares as of June 30, 2020 and December 31, 2019, respectively.
b. A Company share grants to its holder voting rights, rights
to receive dividends and rights to net assets upon dissolution.
c. Weighted average number of shares used for calculation
of basic and diluted loss per share:
June 30 June 30 December 31
2020 2019 2019
------------------ ------------------ ------------------
Unaudited Unaudited Audited
------------------ ------------------ ------------------
Number 346,892,570 314,650,176 329,934,018
================== ================== ==================
The following table lists the number of share options and the
exercise prices of share options during the reported period:
June 30, 2020 December 31, 2019
-------------------------- -----------------------------
Unaudited Audited
-------------------------- -----------------------------
Weighted
average Weighted average
Number of exercise Number of exercise
options price options price
-------------- ---------- ---------- ----------------
GBP GBP
-------------------------- ----------------------------
Share options outstanding at
beginning of period 49,293,947 0.027 33,496,480 0.037
Share options expired during
the period (3,340,000) 0.018 (492,533) 0.04
Share options granted during
the period 4,000,000 0.015 16,290,000 0.007
Share options outstanding at
end of period 49,953,947 0.027 49,293,947 0.027
============== ========== ========== ================
Share options exercisable at
end of period 45,953,947 0.028 27,587,280 0.038
============== ========== ========== ================
d. During May 2020 the Company issued 6,150,288 new ordinary
shares in to Mr. Avi Hartmann, the Company's CEO ("Ordinary
Shares") at a price of 1 pence per Ordinary Share in
order to convert $75 thousand (GBP61 thousand) of historic
unpaid salary. See also Note 6.
NOTE 5 - FINANCIAL LIABILITIES OF CONVERTIBLE LOANS AND WARRANTS
During March 2020, The Company received from its Directors,
CFO and an employee (hereinafter: "the lenders") loans
in the total amount of $290 thousand (GBP244 thousand)
in the form of convertible loans enabling the lenders to
convert the loans at an exercise price of GBP0.0125 per
share at any time up to September 30, 2021. The convertible
loan bears interest at the rate of 8% per annum calculated
by reference to the principal amount of the convertible
loan.
In addition, the lenders received fully vested warrants
to subscribe a total of 4 million further shares at an
exercise price of GBP0.015 per share. Any unexercised warrants
expire at the end of two-years from grant.
The loan was evaluated and divided to different components
by independent appraisers as follows:
Conversion component at fair value - 59$ thousand
Warrants at fair value - 12$ thousand
Amortized cost of a loan - 210$ thousand
Transaction costs were allocated according to the component's
fair value ratio.
The part of the expenses that is attributed to the amortized
cost of the loan was reduced from its cost.
An effective interest rate was calculated for the liability
component of the loan, based on its amortization table.
The effective interest rate is 35.2% per annum.
Total revaluation expenses regarding these components in
the statement of comprehensive loss for the reported period
amounted $12 thousand, net.
NOTE 6 SHAREHOLDERS AND RELATED PARTIES
-
a. Related parties that own the controlling shares in
the Group are:
Mr. Avraham Hartman ( 8.63 %), Mr. Uri Hartman (6.71%),
Mr. Doron Kedem (6.71%).
b. Short-term balances: June 30 December
31
2020 2019 2019
---------- ---------- ---------
Unaudited Unaudited Audited
---------- ---------- ---------
Credit balance
Avi Hartmann* (73) (196) (213)
Uri Hartmann (367) (298) (336)
Doron Kedem (173) (166) (173)
Total Credit balance (613) (660) (722)
---------- ---------- ---------
Loans
Avi Hartmann 73 6 73
Uri Hartmann (228) (223) (226)
Doron Kedem 207 213 207
---------- ---------- ---------
Total Loans 52 (4) 54
---------- ---------- ---------
Total Short-term
balances (561) (664) (668)
========== ========== =========
* See also Note 4d.
c. Transactions: Six Months Ended Year Ended
June 30 December
31
2020 2019 2019
---------- ---------- -------------
Unaudited Unaudited Audited
---------- ---------- -------------
Total salaries, services
rendered and related
expenses for shareholders 151 193 365
========== ========== =============
Total share-based
payment expenses 72 57 112
========== ========== =============
Interest to related
parties 5 5 9
========== ========== =============
NOTE 7 - COST OF SALES
Six Months Ended Year Ended
June 30 December
31
2020 2019 2019
---------- ---------- -----------
Unaudited Unaudited Audited
---------- ---------- -----------
Purchases and other 1,313 1,884 3,883
Amortization 246 222 457
Increase in Inventory (2) (262) (321)
1,557 1,844 4,019
========== ========== ===========
NOTE 8 - NET FINANCE EXPENSES
Six Months Ended Year Ended
June 30 December
31
2020 2019 2019
----------- ----------- -----------
Unaudited Unaudited Audited
----------- ----------- -----------
Exchange rate differences 22 (69) (183)
Bank charges (24) (40) (77)
Interest to banks and
others (22) (9) (31)
Interest to suppliers (16) (8) (13)
Interest to related parties (5) (5) (9)
Net finance expenses (45) (131) (313)
=========== =========== ===========
NOTE 9 SEGMENTATION REPORTING
-
Differentiation policy for the segments:
The Company's management has defined its segmentation policy
based on the financial essence of the different segments.
This refers to services versus goods, delivery method and
allocated resources per sector.
On this basis, the following segments were defined:
Segment information regarding the reported segments:
Hardware SaaS Total
--------- ------ -----------------
Period Ended 30.06.2020:
(Unaudited)
Segment revenues 1,296 1,044 2,340
Cost of sales (1,348) (209) (1,557)
--------- ------ -----------------
Gross profit (52) 835 783
Period Ended 30.06.2019:
(Unaudited)
Segment revenues 2,210 900 3,110
Cost of sales (1,735) (109) (1,844)
--------- ------ -----------------
Gross profit 475 791 1,266
Year Ended 31.12.2019:
(Audited)
Segment revenues 4,796 2,021 6,817
Cost of sales (3,805) (214) (4,019)
--------- ------ -----------------
Gross profit 991 1,807 2,798
NOTE 10- SIGNIFICANT EVENTS DURING THE REPORTED PERIOD (COVID-19)
Due to the pandemic outbreak since March 2020, most of the
countries across the Globe had taken extra measures to prevent
and reduce COVID-19 exposure.
Among the actions taken were noted: citizens transport limitations,
closing its borders, shutting some business activity, limitation
of number of employees per square feet, shutting the educations
systems, etc.
The unprecedented conditions resulted in a decrease in revenues
for the period. In addition, normal purchasing processes
and difficult shipping limitations created additional costs
and delays which impacted the fulfilment of some existing
orders. Marketing activities were inevitably disrupted
Operational costs were reduced by approximately 20 per cent
with effect from March 2020 including unpaid leave for employees.
NOTE 11- SIGNIFICANT EVENTS AFTER THE REPORTED PERIOD
The company signed a new financing deal with one of the
leading banks in Israel, based on short term accounts receivable
balance. Respectively, existing long-term financing was
repaid.
-ends-
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END
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