LONDON (ShareCast) - (ShareCast News) - First-half sales and profit margins at Starcom were down on the same period last year, with low cash levels likely to worry some investors, but the wireless tracking specialist cut operating losses and sounded optimistic notes about current and future trading.
Revenues in the six months to 30 June of $2.5m were 5% short of the $2.6m last year, while margins were mainly hit by price erosion of its Helios real time vehicle tracking due to a competitive market and tracking system and associated services (SAS), falling to 38% from 44% last year.

SAS revenues were "not at their full potential" in the first half due to customer delays in activating the software, which management believe will be rectified in the second half with further SAS growth.

Savings of 26%, or $1m, have been made in general and administrative expenses, following $1.35m made in the same period a year ago, which helped operating losses to be cut to $0.44m from $0.5m last time.

With a post-tax loss of $0.6m, period-end cash stood at just $46,000.

A £450,000 ($0.65m) fundraising at 1.5p per share during the period "has provided sufficient working capital for the present needs of the company at its current and near term expected levels of business".

On the outlook, Starcom said: "As in previous years, we expect most of the second half revenues to fall into the fourth quarter. Although results in the first half of this year are essentially similar to those of last year, the size and quality of the sales pipeline and the level of maturity of the new products are both significantly stronger by comparison. There are some fairly significant sales opportunities being examined both in the US and elsewhere."

Shares in Starcom were down 22% to 3.12p by late afternoon on Wednesday.

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