Starcom PLC Trading Update (1843C)
October 15 2020 - 2:05AM
UK Regulatory
TIDMSTAR
RNS Number : 1843C
Starcom PLC
15 October 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.
15 October 2020
Starcom Plc
("Starcom" or the "Company")
Trading Update
The Board of Starcom, 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,
provides an update on the business of Starcom in the light of the
COVID-19 pandemic.
As previously reported, COVID-19 caused many of the Company's
customers to have reduced their activities since March of this year
and consequently revenues have been hit significantly. Cost cutting
measures have been taken accordingly and additional bank facilities
were secured a few months ago to support the cashflow. These have
enabled the Company to continue to trade, albeit at levels lower
than expected in earlier management budgets.
The Company continues to maintain and further develop its
customer relationships, especially the long-term relationships with
strategic customers which we believe will gradually become key
drivers of Starcom's future growth. We also continue to explore new
opportunities to strengthen the pipeline that may contribute to
sales in 2021, when trading at our customers will hopefully return
to some sort of normality.
Special focus is being placed on customers that are less
affected by the current crisis. Two good examples are Zero
Motorcycles and CropX technologies:
Zero Motorcycles ("Zero")
Zero, the American electric motorcycle company, has recently
announced a groundbreaking joint venture with Polaris Inc. This is
a ten-year exclusive partnership to develop electric off-road
vehicles and snowmobiles and it is anticipated that the first of
several electric vehicles will debut by the end of 2021. Polaris
(NYSE: PII) is listed on the New York Stock Exchange with revenues
of more than $6.7 billion and serves more than 100 countries across
the globe. Based on its announcements as a public company, its
long-term goal is to establish itself as the powersports electric
vehicle leader by 2025.
Starcom, as a provider of monitoring and tracking technology to
Zero, has a potential opportunity to also supply this technology to
the Polaris-Zero joint venture over the coming years. Starcom and
Zero have already initiated negotiations about this exciting
development, a lthough it is impossible at this stage to indicate
if this opportunity will come to fruition and the timing of
such.
CropX
CropX continues to place further orders with Starcom, is
expanding through acquisitions and has been successful in raising
new [equity] funding despite the impact of COVID-19. In September,
CropX announced the acquisition of REGEN, a company in New Zealand
that provides cloud-based, precision effluent and irrigation
decision support tools. REGEN delivers more than 200,000 client
recommendations annually based on its soil data and decision
support platform, and the acquisition adds 130,000 acres to the
CropX platform that is supported by Starcom's product. This
expansion at CropX is expected to have positive impact on CropX's
demand from Starcom.
Even in times like these, as new orders are difficult to secure,
Starcom's recurring and high margin SaaS revenues of approximately
$170,000 per month continue to be collected and provide a solid
foundation underpinning the overall revenues. We are pleased to see
that most active clients remain subscribed to the service. This
enables us to keep our research and development effort at its
pre-COVID-19 level. We are confident that by maintaining our
technological advantage, in parallel to maintaining the customer
relationships, we will be able to come out of the crisis ready to
exploit the many opportunities that will present themselves.
Enquiries:
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 - Corporate Finance
Guy McDougall - Sales 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
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