Starcom shares jump over 3% on rising profit expectations

Starcom PLC (LON:STAR) have seen their shares jump over 3% as profit expectations have circulated around the firm following a period of strong trading.

The firm said on Monday that it expects to swing to an annual profit following strong revenue gains tied in with stable gross margins.

“The Board considers the progress made in 2019 provides a solid start to 2020 and that it indicates a promising growth trajectory for Starcom for this year and next.”

Starcom noted that their revenue rose 14% to $6.8 million from $6.0 million in 2018.

Adjusted earnings before interest, tax, depreciation and amortization are expected to be around $300,000, swinging from a loss of $8,000 the year prior. Gross margin remained stable at 41% compared to 40% for 2018.

The wireless solutions for remote tracking and monitoring of assets and people firm said that it strengthened it product offering and created its own opportunity for accelerated growth.

Starcom added that demand for its intelligent padlock product Lokies grew, adding that it has recently signed an agreement with a Russian distributor who has ordered an additional 500 units

Looking forward, the firm said that in 2020 it will be looking to delivery up to $2 million worth of Lokies, which will give a great chance for the firm to expand its horizons.

Looking ahead, Starcom said it will build on its collaborations with companies such as Zero Motorcycles Inc, Israel Chemicals Ltd and WIMC Solutions Inc.

Avi Hartmann, CEO of Starcom, commented, “We are pleased that the 2019 year-end financials are on target and reflect an upward trend, with revenue growth and positive Adjusted EBITDA. We are delighted to see that the changes in our product offering, which we have worked so hard on over the last three years, are now coming to fruition and we believe this will result in accelerated growth in 2020 and beyond.”

Shares in Starcom trade at 1p (+3.83%). 3/2/20 12:54BST.

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