Browsing the PhotonStar LED (LON:PSL) website and delving into the company’s last set of accounts it would be very easy to get the wrong impression.
Neither really portrays fully the transformation of the business from a high-end lighting specialist to an organisation at the cutting-edge of innovation.
But that’s exactly what is happening.
At the vanguard of M2M
For PhotonStar is at the vanguard of machine-to-machine technology, also known as the internet of things (IoT).
It has developed the Halcyon intelligent wireless lighting system and is moving swiftly to control other areas of the office environment such as heating, water and noise.
It even has a remote window blind system that responds to the changes in the weather.
“We came from the lighting end but have grown it to the whole suite of products,” said PhotonStar chief executive James McKenzie.
Holding it all together is its Halcyon cloudBMS software remotely connecting multiple buildings, built on IBM’s Watson IoT platform that segues with the technology giant’s Maximo and Tririga facilities management systems.
Being able to remotely control the whole building ecosystem across multiple sites can lead to huge energy savings.
Further economies can be garnered
Significant further economies can be garnered from fixing a device before it goes wrong using what’s called predictive maintenance.
“We reckon our service will be able to save 80% of the trips to site,” said boss McKenzie.
“Our connectivity is ‘retrofitable’ and unique in the sense that wireless is so cheap to install. It is around a fifth of the [cost of the] wired solution.”
The partnership with IBM was not coincidental; the technology and consulting giant’s systems are embedded with around 80% of building managers worldwide that are also potential customers of PhotonStar.
The AIM-listed minnow was in exalted company when it was invited to showcase its cloudBMS system at the IBM Interconnect gathering in February.
“We partnered with them [IBM] because they have a customer base we are really interested in,” said McKenzie.
“We are pretty unique now as we have demonstrated integration with Maximo and we are integrating currently with Tririga.
“Clearly they have a business to run, but they are helping us help their customers.
“We may do some co-selling but really we are at the let’s-prove-it-works-stage.”
It is fair to say the transformation from a traditional consumables business to a services firm driven by the internet of things is far from complete.
Fundraising to complete software development and scale-up
A recent £1mln fundraising will allow PhotonStar to complete the development of its software and scale it up.
There are about 200 Halcyon systems deployed, but PhotonStar is currently at the trial stage with many of the installations.
Recently Royal Bank of Scotland selected the firm to take part in its Go Green initiative and has funded a commercial trial of the Halcyon technology.
Tests are being carried at one of the state-owned lender’s offices in Bristol.
A full commercial contract would be transformational for the AIM-listed business, which is currently valued at just over £5mln.
The annual results reveal a company in transition. Sales were down and losses almost doubled in the year to December 31 to around £3mln.
A large part of that shortfall was the result of an exceptional charge of around £2mln.
This non-cash item was essentially a write-off of the remaining goodwill on the balance sheet inherited as part of the reverse takeover of Enfis back in 2010.
In layman’s terms it was the accounting equivalent of drawing a line under the past.
“We had a lot of goodwill around a business we weren’t going to be in. We wanted it all out of the way; a reset so we could move forward,” said McKenzie.
“There are no more surprises on the balance sheet and we can focus on what is a genuinely exciting collaboration with IBM.”