1st May 2018 13:01
LONDON (Alliance News) - Cellcast PLC said Tuesday it sunk to a full year loss due to impairments charges and higher cost of sales.
In 2017, the digital broadcaster sunk to a GBP652,437 pretax loss from a GBP651,999 profit the year prior. Revenue also fell modestly to GBP12.0 million from GBP12.1 million the year before.
Profit performance was hurt by a rise in cost of sales to GBP11.2 million from GBP11.0 million the year prior. A GBP754,358 impairment also harmed profit with GBP309,973 associated with the cash due from its Lexinta Fund investment and GBP369,427 connected with amounts due from its Global Gaming associate.
In December, Cellcast started legal proceeding against Lexinta after the fund management firm refused to say what it had invested in. In January it deemed it "prudent" to impair its holding in Lexinta after an investigation by the Swiss authorities.
"Whilst the board has taken the prudent approach of making a 100% provision for the funds held by the group in relation to the Lexinta Fund, this has not had an impact on the day to day running of the business, which continues to have sufficient funds for its normal operations", Cellcast Chief Executive Officer Craig Gardner said.
"Whilst we continued to see a gradual decline in the core interactive broadcast business throughout 2017, the reduction in revenue from the production and distribution of participatory television formats has been partially offset by an increase in revenues from online and mobile interaction," Gardner said. "In addition, revenue contribution from the group's overseas consultancy operations also improved."
"The core focus of the board in 2017 has been to control the cost base in all areas of the business," Gardner added. "The renegotiation of our supplier bandwidth agreements in July 2017 has led to the company trading profitably at the operating profit level in the second half of the financial year."
Shares in Cellcast were 4.4% lower at 2.20 pence on Tuesday.