The name PhotonStar LED Group PLC (LON:PSL) might not strike you as one describing a company operating in the field of the Internet of Things.
If that is the case, let me shed some light.
Having sold its Camtronics Vale subsidiary to management in January to the electronics components maker’s management, the spotlight has shifted even more away from a business model where it provided light emitting diode (LED) lighting solutions to the new build market to one where it is a software and services business focused on lighting and building management as a service.
Halcyon days
Its flagship solution is named halcyon, a retrofit building control & cloud-based building management technology that uses the Internet of Things (IoT) to reduce operating costs for businesses.
In May, the company released a new version of its halcyon cloudBMS product as it announced a proposed placing to raise additional working capital.
According to the firm, the latest version of halcyon cloudBMS, Halcyon V2, is characterised by its low cost, retrofit-able wireless monitoring and control platform, halcyonPRO2.
The new release included an updated software version for the halcyonPRO2, which includes monitoring of emergency lighting systems, energy clamps, leak detectors, water monitors and critical asset-monitoring devices, augmenting the regulation of heating and cooling, shading and lighting control of previous versions of the software.
The firm added that Halcyon V2 and the latest software release for halcyonPRO2 would combine to deliver a building management system as a service, via a monthly subscription model that enables building estate owners and managers to reduce energy and operating costs and experience greater transparency across their operations.
One of the key features of Halcyon V2 is its data analytics-ruled engine that allows notifications of performance changes or faults to be shared via email and SMS, as well as remote compliance reporting and energy monitoring.
The company is also aiming to offer Halcyon V2 to the restaurant and hospitality industry to solve issues regarding the monitoring and maintenance of walk-in freezers, air extraction systems, cooling and hot water systems and other critical assets.
PhotonStar added that the platform also provides a full cloud-based environment for the monitoring of buildings including leaks, room occupancy, temperature, CO2, humidity and noise.
Dr James McKenzie, PhotonStar chief executive, said: "We expect that the completion of the testing of Halcyon V2 will allow the group to progress beyond the various single site trials that we currently have in place and roll out its products across multiple sites, as a solution to customers' operational cost problems.
He added: “The cloud-based compliance reporting, IoT data analytics and fault notifications will mean that, once the system is installed, site visits should be reduced to essential maintenance work. We believe this will offer compelling cost savings for building owners, primarily by reducing the number of site visits by up to 90% in commercial buildings.”
Light at the end of the tunnel
Results for 2017 revealed why the company is pinning its hopes on the new business direction, albeit while keeping the legacy business the straight and narrow.
It posted an adjusted EBITDA loss for the year of £480,000, an improvement on the previous year’s LBITDA of £700,000. The operating loss was £1.19mln compared to £1.38mln the year before.
While losses were lower, so were revenues – at £4.5mln, compared to £5.3mln the year before.
Trading continued to be difficult in the traditional LED business with competitive price pressure showing no sign of abating. As a result of increased demand for its circadian lighting products in the health care sector, the revenues for 2018 were expected to grow for this product line. This product is currently on trial with three care home groups with over 40 care homes in their estates.
Management conceded the sales performance in 2017 was disappointing but said it is now a much leaner business, while its balance sheet has been strengthened.
At the end of 2017, net debt stood at £789,000, versus debt of £606,000 a year earlier but in 2018 the group successfully raised £881,000 through the issue of new equity in February and May, while the £150,000 received from the sale of Camtronics Vale also boosted the coffers.