Touchstar PLC (LSE:TST) shares fell almost 23% to 57.7p after the security and logistics group said it expects annual revenues to come in below market expectations, with only a small pre-tax trading profit.
Revenues for the calendar year are expected to be around £6.7 million, with the company citing continued economic softness and customer hesitancy in placing orders.
Full-year results will also include a £1.25 million impairment relating to a change in the accounting treatment of software development costs, and non-trading charges of £0.2 million linked to senior management restructuring.
Year-end cash is expected to exceed £2 million.
Touchstar said 2025 had been a year of significant transformation, with the business now restructured under new chief executive Lynden Jones and focused on improving internal efficiency and positioning for growth.
CEO Jones said: "Since my appointment I have undertaken a review of the business and have started to implement measures to help build Touchstar into a better and more substantial company over the medium term.
"I am confident this can be delivered setting a new direction for Touchstar to become the leading partner in securing the logistics of people and product.
"The short term will be difficult as we are now budgeting for the faltering economy to persist throughout 2026. Thus, we are resetting and reducing expectations for next year."
He said the next twelve months are anticipated to see "some acceleration of the rate of growth" in revenue that he expects to be followed by "a step change in 2027 with further acceleration into 2028".
"The transformation within the company has been radical, effective and has given the business new energy and purpose - it was an aggressive timeline to complete the process by year end - but it has been completed."
Objectives for 2026 include finalising the new management transition, reviewing acquisition opportunities, and enhancing the company’s market positioning across depot, warehouse and retail markets.