31st Oct 2018 11:00
LONDON (Alliance News) - Shares in Photonstar LED Group PLC almost halved Wednesday after the company said it is considering sale of its LED fixed lighting business due to continuation of difficult trading conditions.
Shares in Photonstar were 48% lower at 0.070 pence on Wednesday.
Photonstar said its traditional LED fixed lighting business - PhotonStar LED Ltd - was continuing to experience "very challenging" trading conditions amid ongoing "competitive price pressures" in October. This was after the expected demand for its circadian lighting products did not materialise.
The firm added that new management forecasts for the remainder of 2018 suggested the unit would "not experience the same level of seasonal growth" in the fourth quarter of 2018 as has "historically" been the case.
In addition, 2019 revenue forecasts now had "significant uncertainty" around them.
Consequently, Photonstar was now "considering the options" for Photonstar LED Ltd. A potential "distressed" sale is one such option with the possibility of putting the firm into administration another. In calling in the administrators, Photonstar explained, it would hope to reduce the debt of the overall group as well as overheads and operational losses.
A further announcement on its plans for Photonstar LED Ltd will be made "as soon as practicable."
Photonstar Technology Ltd - the company's building internet of things firm - remains focused on its v2 halcyon cloudBMS software. This includes its "low cost, retrofittable wireless monitoring and control platform, halcyon PRO2, and the upgraded cloud service platform, cloudBMS."
Despite this, it has yet to sign a "material contract" for the roll-out of Halcyon V2 despite ongoing discussions with "several" potential customers and previously announced trials.
For the six months ended June, its fixed LED lighting unit generated GBP1.1 million of its total GBP1.3 million revenue. Its technology unit generated only GBP49,000 revenue.
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