23rd May 2016 07:55
LONDON (Alliance News) - Photonstar LED Group PLC on Monday said it received blows from large impairments and competitor price reductions in 2015, but said it entered 2016 as "a much stronger business" having reduced its cost base.
The LED lighting manufacturer posted a pretax loss of GBP3.0 million for the year ended December 31, widened from GBP1.6 million a year earlier, largely due to the company incurring a GBP2.0 million non-cash impairment during the year.
The majority of the impairment, GBP1.6 million, relates to the remaining goodwill on the balance sheet from the reverse transaction with Enfis in 2010, Photonstar said. In 2010, Enfis Group PLC completed a reverse takeover of PhotonStar LED Ltd, and renamed itself PhotonStar LED Group.
However, Photonstar also saw revenue drop 4.0% during the year to GBP6.9 million from GBP7.2 million, mainly reflecting the decline in LED fixture sales to GBP6.7 million from GBP6.9 million. This, the company said, was due to competitor price reductions, which it said also increased pressure on margins.
Photonstar said its fixed cost base for the business was "now substantially reduced", and both cost of sales and administrative expenses came in lower for the year.
The company added that its initial development of its intelligence lighting product Halcyon was now largely complete, with current and future development work focused on improvements to the Halcyon product.
"In 2015, we made good progress in transitioning into becoming a retrofit connected lighting and building management business, with over 200 Halcyon systems deployed," said Chief Executive James McKenzie.
"The traditional lighting business, however, was affected by significant competitor price reductions, resulting in a slight decline in revenues and increased pressure on profit margins. The group entered 2016 as a much stronger business, with a significantly reduced cost base and a clear market opportunity," McKenzie added.
Shares in Photonstar were down 4.4% at 2.75 pence on Monday.
By Hannah Boland; [email protected]; @Hannaheboland
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