26th Apr 2018 10:59
LONDON (Alliance News) - Touchstar PLC on Thursday said it swung to a loss for 2017 as administrative costs grew significantly after restructuring.
The mobile computing company reported a pretax loss of GBP3.8 million for 2017 compared with a pretax profit of GBP213,000 the prior year. This was after its administrative expenses jumped to GBP7.7 million from GBP3.8 million.
The above costs relate to redundancy expenses and onerous leases, Touchstar said, as a result of the restructuring of the business in the year in order to streamline its operational structure.
Revenue rose slightly year-on-year to GBP7.9 million from GBP7.6 million.
Looking ahead, the company said it intends to adopt a new IFRS 15 accounting standard mainly affecting revenue from software licences. This revenue will thus be recognised over the licence period rather than when cash is received.
Touchstar said this movement will have a material negative impact on the top and bottom line of its 2018 financial results, however thereafter it should have less overall impact following recurring revenue growth.
"The group needed to change to have a vibrant future and, as we move to scale the business, we have arrived at the point where there is no turning back. Whilst this may seem a little scary it is very exciting," said Chairman Ian Martin.
"Whether we succeed or not is down to us, we have to be braver and more ambitious, the upside if we get this right could be considerable. We are focused upon making this happen," Martin added.
Shares in Touchstar were down 12% at 60.10 pence per share on Thursday.
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Touchstar Plc