Underlying losses more than halved at lighting solutions provider PhotonStar LED Group PLC (LON:PSL), as it cut costs in reaction to tightening market conditions.
The smart light emission diode (LED) lighting solutions specialist is in the process of shifting emphasis from its traditional business model, providing LED lighting to the new build market, to one where its state-of-the-art Halcyon Internet of Things solution is retrofitted into existing buildings, resulting in lower running costs for the owners of the buildings.
READ: Photonstar raises cash to fund roll-out of IoT platform
The Halcyon system has been installed in a number of market sectors, prompting users to ask for a number of enhancements and amendments, which has led to delays in moving from the trial phase to commercial roll-out.
The fourth quarter will see several new trials for the HalcyonPRO and cloudBMS systems kick off with organisations that have multiple properties in the healthcare, hospitality and housing association sectors.
Meanwhile, price-cutting remains the order of the day in the traditional lighting business, to which PhotonStar has responded by focusing more on the top end of the market, where it can maintain margins more easily.
First-half results
In the first half of the year, revenue eased to £2.26mln from £2.53mln the year before.
LED Lighting Fixtures revenues fell by 14% to £1.36mln from £1.59mln the year before, with losses narrowing to £0.05mln from a loss of £0.25mln the year before.
READ: PhotonStar LED's boss “excited” by application opportunities for its internet-of-things platforms
At the Camtronics Vale subsidiary, contract revenues were up 16% year-on-year to £0.79mln from £0.68mln the year before, with the company breaking even in the period.
Halcyon/Light Engine revenues fell 58% to £0.11mln from £0.26mln the year before, resulting in a loss of £0.13mln from £0.10mln the year before.
For the group as a whole, the underlying loss, or LBITDA, was £0.23mln, versus a loss of £0.54mln the previous year.
The pre-tax loss narrowed to £0.60mln from £0.91mln.
Notwithstanding the need to fine tune the Halcyon system as a result of feedback from the paid-for trials, the research and development work on the creation of the system is now largely complete, and future development work will concentrate on improvements and new customer-led solutions.
As for current trading, it continues to be difficult in the LED fixture market, but the company has seen revenue improvements in all of its business units in the current quarter and currently expects the second half of the year to make a positive contribution to the results for the full year.
“Management remain confident about the market potential for the halcyonPRO2 and its halcyon cloudBMS platform. Progress has been slower than anticipated on finalising the cloudBMS product to customer requirements and it is now expected that this will occur in Q4 2017; however, several new trials for the halcyon cloudBMS platform are now underway which should result in further roll out contracts during 2018," said James McKenzie, chief executive of PhotonStar.