The company sold the unit for £150,000, but the net effect is to reduce the company’s debt by around £460,000, which was more than half of the group’s outstanding debt prior to the transaction.
The disposal marks another step towards Photonstar’s transition into a software and services business focused on lighting and building management as a service.
The smart 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 (IoT) solution is retrofitted into existing buildings, resulting in lower running costs for the owners of the buildings.
At this stage, however, the group’s commitment to the halcyon product range is experiencing teething problems, with modifications to the systems that were identified during trials in 2017 taking longer to implement than expected, which has resulted in delays to full roll-outs of the product.
PhotonStar continues to work in a highly constructive manner with a number of clients who anticipate that roll- outs of the system will begin shortly, but the group and the clients want to ensure that the modifications are successfully completed and tested before a full roll-out begins, the group said in a trading statement.
The group now expects that the full roll-outs will commence in the first half of 2018.
Although the final numbers have not yet been audited, Photonstar said it expects revenue for 2017 will be £4.7mln, down from £5.4mln.
The underlying loss, or LBITDA, is expected to be in the region of £350,000 versus LBITDA the year before of £700,000.
As of 31 December 2017, the group had drawn down roughly £760,000 of its invoice financing debt out of its total maximum facility of £1.65mln and had an unaudited cash balance of some £400,000.