REG - Touchstar PLC - Results for the year ended 31 December 2025
07/05/2026 07:00
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RNS Number : 3106D Touchstar PLC 07 May 2026
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain
Touchstar plc
Results for the year ended 31 December 2025
2026 is expected to be a pivotal year, with a stronger pipeline supporting the
transition to a sustainable, growth‑oriented model.
The Board of Touchstar plc ((AIM: TST) "Touchstar", the "Company" or the
"Group"), suppliers of mobile data computing solutions and managed services to
a variety of industrial sectors, is pleased to announce its results for the
twelve months ended 31 December 2025 ("FY25" and "Period").
Key Financials
2025 2024
Revenue £6,821,000 £6,893,000 Decline 1%
Recurring revenue £3,209,000 £3,051,000 Increase 5.2%
Pre tax (loss)/profit £(1,341,000) £388,000
Post tax (loss)/profit £(1,081,000) £366,000
Adjusted post tax profit * £312,000 £423,000 Decline 25.8%
Adjusted EPS * 3.83p 5.16p Decline 25.8%
Basic (loss)/earnings per share (13.29)p 4.47p
Total ordinary Dividend per share 3.25p 3.0p Increase 8.3%
Adjusted EBITDA* £759,000 £1,156,000 Decline 34.3%
Year-end net cash £2,338,000 £2,918,000 Decline £580,000
Margins 57.6% 60.2% Decline 260 basis points
*Excludes exceptional costs of £1,393,000 (note 5)
(2024: exceptional costs £57,000).
Highlights
· 2025 delivered a resilient underlying performance, with
breakeven trading before exceptional items (£2,000 operating profit; £56,000
PBT), despite a year of significant organisational restructuring and product
portfolio review.
· Exceptional non‑cash charges of £1.18m relating to
the impairment of development assets, resulted in a statutory loss but do not
impact liquidity or operational strength.
· Recurring revenue increased over 5% to £3.21m,
representing 47% of total turnover, reinforcing the conscious shift toward a
more predictable, SaaS‑led model.
· Cash remains strong at £2.34m, after funding dividends
and share buybacks - demonstrating continued financial resilience and
disciplined cost control amid significant inflationary pressure.
· Order intake entering 2026 is materially stronger, with
Q1 2026 intake exceeding all corresponding periods since 2021, supporting
confidence in forward momentum.
· 2025 restructuring has strengthened the organisational
foundation, creating two balanced divisions and embedding clearer
accountability, positioning the Group for improved scalability and growth.
· 2026 is expected to be a pivotal year, with a sharper
commercial focus, maturing development governance and a stronger pipeline
supporting the transition to a sustainable, growth‑oriented model for future
years.
Lynden Jones, CEO of Touchstar commented:
"The Group enters 2026 with a clearer organisational structure, a strengthened
leadership team and a more focused strategic direction. The restructuring
undertaken during 2025 has created two balanced divisions with improved
accountability, enhanced cross‑selling potential and greater operational
efficiency.
While challenges remain, we are confident in the forward direction of the
business. The early signs are positive with trading for the first quarter of
FY26 in line with expectations and order intake being ahead of the equivalent
period in every year since 2021.The focus for the remainder of 2026 is
disciplined execution, strengthening pipeline generation, maturing development
processes, and building the commercial engine required for sustainable
growth."
For further information, please contact:
Touchstar plc Ian Martin/Lynden Jones 0161 874 5050
Zeus Capital - Nominated adviser and broker Mike Coe/ Darshan Patel 0203 829 5000
Information on Touchstar plc can be seen at: www.touchstarplc.com
(http://www.touchstarplc.com/)
Chairman's statement
In 2025, the Group focused on strengthening its foundations for future growth.
Under the leadership of our new CEO Lynden Jones, the business has undergone a
structured reorganisation designed to improve efficiency, cement
collaboration, and embed greater accountability across all functions. While
the costs of these changes have impacted our reported results for the year,
they reflect the scale of transformation underway which will position the
Group more strongly for the future.
Looking ahead, 2026, will be a pivotal year as we reshape the business. Our
priorities are clear:
· completing the transition to next‑generation management;
· repositioning the Group to serve the broader depot, warehouse,
and retail markets;
· defining a next‑generation product range aligned with our brand
and long-term strategy, and;
· increasing market profile through stronger communication and
marketing.
The Group is moving away from its historic dependence on upgrade‑related
income and is instead positioning itself for longer‑term, sustainable
growth. This involves strengthening our commercial foundations, broadening our
routes to market, and embedding a more structured approach to customer
engagement. It is a meaningful shift in how the business operates, and while
the transition is still progressing, the momentum and direction are firmly
aligned with our strategic ambitions.
We recognise that 2026 will remain a transition year, characterised by ongoing
market uncertainty and opportunities driven by technology evolution, changing
customer needs and a requirement to have operational efficiency. With
increased investment and a sharper commercial focus, along with a disciplined
approach to product and customer management, Touchstar is well placed to
respond.
Dividend
The Board recommends a final ordinary dividend of 1.5p per share (FY24: 1.5p).
Together with the interim dividend of 1.75p (FY24: 1.5p) paid in November
2025, this results in a total ordinary dividend for the year of 3.25p (FY24:
3.0p).
Subject to the approval of shareholders at the Annual General Meeting, the
final ordinary dividend of 1.5p per share will be paid on 12 August 2026 to
shareholders on the register on 24 July 2026. The ex-dividend date will be 23
July 2026.
Financial Results and Exceptional Items
Results for the year ended 31 December 2025 were in line with revised market
expectations, albeit below original expectations. Exceptional non‑trading
charges of £1,393,000 comprising:
· £215,000 for senior management reorganisation;
· £1,181,000 impairment of software development costs; and
· £3,000 credit for costs of strategic review.
The impairment has arisen as a result of the Groups new strategy and focus on
product groups.
To provide clearer visibility of underlying performance of the business in
FY25 the table below shows prior comparison inclusive and exclusive of the
exceptional charges taken in 2025.
FY 25 FY 24 Variance FY 25 (ex. Exceptionals) Variance
Metric (Reported)
Revenue £6,821,000 £6,893,000 - 1% £6,821,000 - 1%
Admin expenses £5,302,000 £3,785,000 + 40% £3,910,000 + 3%
Net exceptional costs included in admin expenses £1,393,000 £57,000
Operating (loss)/profit before tax £(1,397,000) £388,000 -£1,785,000 *£56,000 -£332,000
Basic EPS (13.29)p 4.47p - 17.76p
Adjusted EPS 3.83p 5.16p 3.83p - 0.64p
*Adjusted profit before tax excludes net exceptional costs of £1,393,000
(note 5) and share based payment provision £6,000 (note 8(b)).
Revenue declined slightly to £6,821,000 (FY24: £6,893,000), reflecting
customer hesitancy amid economic uncertainty. Underlying costs (excluding
exceptional costs) increased by 3% to £3,910,000, broadly in line with
inflation. Including exceptional items, the Group reported a pre‑tax loss of
£1,397,000 (FY24: £388,000 profit). Excluding exceptionals, the pre‑tax
profit was £56,000. After tax, underlying profit (excluding exceptionals)
declined by £55,000 from £366,000 in FY24 to £311,000, with adjusted EPS
down by 0.64p to 3.83p.
The balance sheet remains strong, with year‑end cash of £2,338,000 (FY24:
£2,918,000). Operating cash flow for FY25 was £736,000. During the year,
£479,000 was returned to shareholders through dividends and share buybacks,
with 278,583 shares repurchased at an average price of 77.5p. This reduced the
voting share capital to 7,921,494 and increased the number of shares being
held in treasury to 553,583 shares.
EBITDA
The Group's EBITDA for the year is summarised below, presented on a reported
and adjusted basis:
FY 25 FY 24 FY 25 (Adjusted)
(Reported)
(Loss)/profit before tax £(1,341,000) £388,000 *£56,000
Less: Interest net received £56,000 £66,000 £56,000
Plus: Depreciation £198,000 £243,000 £198,000
Plus: Amortisation £561,000 £534,000 £561,000
EBITDA £(638,000) £1,099,000 £759,000
*Adjusted profit before tax excludes exceptional costs of £1,393,000 (note 5)
and share based payment provision £6,000 .
Historically, the Group has capitalised both internal (salaries) and external
(contractor) development costs where management considered that the investment
would generate future revenue, amortising these costs over a four‑year
period. As a result, the Group's EBITDA calculation was significantly higher
than the operating profit, because capitalised development expenditure was
excluded from EBITDA while amortisation was added back. Following the
strategic review earlier in the year and findings thereon, a full assessment
of the Group's development activity, product roadmap and market positioning
was completed in November 2025. The review identified that some existing
capitalised development costs no longer met the recoverability requirements,
leading to an impairment. It further established that future development work
would generally not satisfy the recognition criteria for capitalisation unless
it related to new products or clearly defined enhancements.
The combined effect of the revised capitalisation spend, the change in useful
economic life, and the impairment is a structural reset of the Group's EBITDA
profile. Historically, EBITDA was higher because of:
• high levels of capitalised development expenditure, and
• significant amortisation add‑backs.
Under the revised model, moving forward EBITDA will now more closely reflects
the Group's operating cash performance, with materially lower capitalisation
and lower amortisation.
This is explained further in the Statement from the Chief Executive Officer
along with note 9.
This revised policy provides a more transparent and comparable measure of
performance, giving a clearer view of underlying profitability and aligning
the Group with common practice across software and technology‑enabled
businesses.
Outlook
The Group enters 2026 with a clearer organisational structure, a strengthened
leadership team and a more focused strategic direction. The restructuring
undertaken during 2025 has created two balanced divisions with improved
accountability, enhanced cross‑selling potential and greater operational
efficiency.
The Board anticipates a return to revenue growth and profitability in 2027,
supported by:
- increased market activity across logistics, fuel distribution, warehousing
and access control;
- expansion into targeted overseas markets, including the Nordics and Baltics;
and
- the ongoing shift towards SaaS and multi‑year recurring revenue contracts.
The Board remains confident in the Group's long‑term prospects, supported by
a strong product portfolio, a loyal customer base, a committed workforce and a
clear strategy for sustainable growth.
I Martin
Chairman
6 May 2026
Statement from the Chief Executive Officer
2025 marked the beginning of a structured transition for Touchstar as we moved
to address long‑standing commercial, operational, and product‑related
challenges. The business is shifting from a historic reliance on
upgrade‑driven revenues toward a more proactive, sustainable commercial
model built more on new business generation, cross‑selling, and disciplined
customer lifecycle management. This represents a significant cultural and
operational shift, and while early‑stage challenges remain, the direction of
travel is clear and positive.
Commercial Performance
With the enhanced placement of a project delivery team, the sales team can
focus on the next requirement sooner resulting in more sales time. Order
intake for the first quarter of 2026 was in line with expectations and ahead
of first quarter intake for all years since 2021. This is encouraging given
how fragile customer confidence has been and remains.
Our goal is to rachet up the pipeline coverage to a level that supports a
higher growth rate and builds greater resilience into our revenue forecasts.
Our goal is to more aggressively manage the sales pipeline ensuring the
gestational period is kept as short as possible from quote to order.
Operational Delivery and Product Development
Development remains the most significant operational area requiring
improvement. The backlog-comprising defects, enhancements, technical
requirements, and internal product ambitions-is extensive and is now being
fully catalogued and prioritised.
Key actions underway include:
- establishing a clear order of priority aligned to generating revenue and
maximising customer benefit;
- reducing reactive development activity;
- improving the quality of product releases through a reduction in the
frequency of releases; and
- ensuring customers are migrated to current software versions to reduce
legacy burden.
A newly appointed Product Delivery Manager is already improving structure and
visibility, though the function remains in early‑stage transition.
Customer Lifecycle and Renewals
The business has made strong progress in reducing exposure to legacy products,
with only two customers remaining on legacy hardware platforms. Both are
engaged in upgrade discussions, and no material revenue is currently at risk.
Renewal performance remains robust. Work is underway to evolve renewals from
an administrative process to a strategic lifecycle engagement model, supported
by a complete customer lifecycle database and alignment with the product
roadmap.
Sales Execution and Resourcing
Sales execution remains in transition. Pipeline quality and cross‑selling
activity require improvement, and lead‑generation metrics are still being
embedded. However, early indicators are positive, with improved discipline,
stronger communication, and greater ownership of performance across the team.
Recruitment plans remain aligned to strategy but are intentionally phased to
ensure stability. Internal sales hires are planned for late Q2, and the Fire
& Security northern sales role has been approved but not yet initiated.
Overseas Strategy
The overseas channel is progressing from exploratory engagement to
early‑stage development. Initial partner discussions have advanced to a more
strategic level, with negotiations underway regarding solution structure and
customer ownership. Tangible progress is expected by late Q2 or early Q3.
Outlook
Touchstar is in a period of controlled transition, addressing historic
structural weaknesses across sales, development, and customer management. The
need for revenue growth is clearly understood and actively managed, and the
shift toward a proactive, accountable sales culture is underway. Development
governance is improving, customer lifecycle risk has reduced significantly,
and renewal performance remains strong.
While challenges remain, we are confident in the forward direction of the
business. The early signs are positive with trading for the first quarter of
FY26 in line with expectations and order intake being ahead of the equivalent
period in every year since 2021. The focus for the remainder of 2026 is
disciplined execution, strengthening pipeline generation, maturing development
processes, and building the commercial engine required for sustainable growth.
I would personally like to thank all my colleagues across the business for
their continued hard work, professionalism, and commitment to excellence. It
is the consistent effort of individuals-whether operating in customer-facing
roles or supporting functions internally-that underpins the Company's
performance. Those engaging directly with customers continue to represent
Touchstar with integrity and professionalism, reinforcing our reputation in
the market, while our internal teams maintain the operational strength and
discipline required to deliver at scale. As the business evolves, it is
important to emphasise that recent changes reflect a clearer articulation of
who we are and how we present ourselves externally, aligned under our unified
strapline, "securing the logistics of people and product." While there have
been some departures during this period, we remain focused on supporting those
who continue with the business. Their resilience, adaptability, and
willingness to take ownership are driving accelerated personal development and
ensuring continuity of performance as Touchstar moves forward with clarity and
purpose.
L N Jones
Chief Executive Officer
6 May 2026
EXTRACTS FROM THE STRATEGIC REPORT
Business Review and Principal Activities
The Group supplies, installs and maintains licensed software applications and
hardware solutions for mobile applications in the transport, logistics,
warehousing, fuel distribution and access control industries. Our solutions
combine in‑house developed software, rugged mobile computing hardware and
managed services to deliver complete, integrated systems that enhance
operational efficiency, compliance and customer service for our clients.
During 2025, the Group continued to develop and enhance its product portfolio,
with a particular focus on strengthening cloud‑based platforms, expanding
SaaS capability and improving the performance and usability of our hardware
devices. The Group operates under the Touchstar brand, providing consistent
brand awareness and a cohesive market presence across all operating companies.
A key development during the year was the restructuring of the business into
two balanced divisions, designed to improve operational focus, enhance
cross‑selling opportunities and support the Group's long‑term growth
strategy. This restructuring has strengthened the organisational foundation
and positioned the Group for improved scalability and market penetration.
Key Performance Indicators
The Group uses a range of financial and operational key performance indicators
(KPIs) to monitor performance, assess progress against strategic objectives
and support effective decision‑making. The KPIs reflect the Group's focus on
sustainable growth, recurring revenue expansion, operational efficiency and
long‑term value creation.
Revenue
Total revenue for the year was £6,821,000 (2024: £6,893,000). Revenue
remained broadly stable despite a more cautious economic environment and
slower customer decision‑making cycles. The Group continues to prioritise
high‑quality revenue streams, particularly those linked to recurring income
and multi‑year contracts.
Gross Margin
Gross margin for the year was 57.6% (2024: 60.2%). While slightly lower than
the prior year, the margin remains robust and reflects the strength of the
Group's in‑house IP, managed service offering and disciplined pricing
strategy. Margin performance continues to be a key indicator of product mix,
operational efficiency and the value delivered to customers.
Recurring Revenue
Recurring revenue increased over 5% to £3,209,000, representing 47% of total
turnover (2024: £3,051,000; 44%). This remains one of the Group's most
important KPIs, reflecting the continued transition to a SaaS‑led model and
the growing proportion of predictable, contracted income. The increasing
proportion of predictable, contracted revenue provides a stable platform for
future investment and supports the Group's transition towards a more scalable,
software‑led business model. The Board remains committed to further
strengthening this revenue stream as a strategic priority.
Order Intake
Order intake for the year was £3,651,000 (2024: £4,867,000). The reduction
reflects slower order pipeline conversion in the first half of the year and
the timing of larger capital projects. Order intake remains a key indicator of
future revenue visibility and market activity.
Intake for the first quarter of 2026 was in line with management expectations
and exceeds that in all corresponding periods since 2021.
Order Book
The order book at 31 December 2025 was £876,000 (2024: £1,270,000). While
lower than the prior year, the pipeline entering 2026 is materially stronger,
supported by enhanced product capability, increased cross‑selling
opportunities and a more focused divisional structure.
Operating Profit Before Exceptional Costs
Operating profit before exceptional costs was £2,000 (2024: £408,000
profit). This KPI provides a clearer view of underlying trading performance,
excluding non‑recurring items such as impairment charges and restructuring
costs. Even with the impact of inflation on costs, the breakeven position
reflects disciplined cost control during a year of transition.
Cash and Liquidity
The Group ended the year with cash of £2,338,000 (2024: £2,918,000), despite
spend on product development (£658,000), payment of dividends (£264,000) and
execution of share buybacks (£215,000). Cash generation and liquidity remain
key KPIs, underpinning the Group's ability to invest in growth and maintain
financial resilience.
Employee Retention and Engagement
The Group continues to benefit from a stable and committed workforce, with low
attrition and long average tenure. Employee engagement, capability and
retention remain critical KPIs, given the importance of technical expertise
and customer service to the Group's success.
Order Intake and Order Book
Order intake for the year was £3,651,000 (2024: £4,867,000). The reduction
reflects the slower pace of customer decision‑making across several sectors,
particularly in the first half of the year, as well as the timing of larger
capital projects.
The order book at 31 December 2025 stood at £876,000 (2024: £1,270,000).
While lower than the prior year, the pipeline entering 2026 is materially
stronger, supported by increased cross‑selling opportunities, enhanced
product capability and a more focused divisional structure.
The Group's recurring revenue base continues to mitigate fluctuations in order
intake, providing a strong foundation for future growth.
Business Environment
The Group's operations remain focused on the logistics, transport
distribution, warehousing, fuel delivery and secure access control markets.
Although these sectors serve different customer needs, the nature of the
products, services and channels to market are comparable, and the Directors
therefore continue to regard the Group as operating in one primary segment.
Activity levels across the sectors in which we operate remained steady during
2025, despite a more cautious economic backdrop. Customers continued to invest
in technology to improve operational efficiency, compliance and safety, and
the Group's ability to provide a complete, integrated solution across
hardware, software and managed services remained a key differentiator.
The restructuring undertaken during the year has strengthened the Group's
operational alignment and created two balanced divisions with clearer
accountability and improved cross‑selling potential. The two divisions are
known as IQ Logistics and Fire & Security with the strap line 'Securing
the Logistics of People and Products'. This structure enhances our ability to
deliver end‑to‑end solutions and increases the relevance of our offering
across multiple industries.
Strategy
The Group's strategy is to deliver sustainable long‑term growth through a
combination of product innovation, market expansion, operational efficiency
and disciplined investment. The restructuring undertaken in 2025 has created a
stronger platform from which to execute this strategy.
Strategic Priorities
- Strengthen recurring revenue through continued expansion of SaaS licences,
multi‑year support contracts and managed services.
- Enhance product capability across both software and hardware, including the
Back Office platform, ATEX and non‑ATEX devices, and next‑generation
access control terminals.
- Expand market reach, with a focus on the Nordics, Baltics and selected US
opportunities, supported by targeted marketing and partner channels.
- Increase cross‑selling between divisions to maximise customer lifetime
value and improve solution penetration.
- Pursue selective acquisitions that complement the Group's product set,
strengthen market position and accelerate growth.
- Improve operational efficiency through clearer divisional accountability,
streamlined processes and enhanced use of technology.
Use of AI in Development
The Group continued to adopt AI‑enabled tools, including GitHub Copilot, to
support software enhancements. These tools improve code quality, reduce
development time and enhance security by identifying vulnerabilities earlier
in the process. Importantly, all software developed using these tools remains
the intellectual property of Touchstar.
Consolidated income statement for the year ended 31 December 2025
2025 2024
£'000 £'000
Revenue 6,821 6,893
Cost of sales (2,889) (2,743)
Gross profit 3,932 4,150
Distribution costs (27) (43)
Administrative expenses (5,302) (3,785)
Operating profit before exceptional costs and share-based payment provision
2 408
Exceptional costs (1,393) (57)
Share-based payment provision included in administrative expenses (6) (29)
Operating (loss)/profit (1,397) 322
Finance income 76 79
Finance costs (20) (13)
(Loss)/profit before income tax (1,341) 388
Income tax credit/(charge) 260 (22)
(Loss)/profit for the year attributable to the owners of the parent
(1,081) 366
Earnings per ordinary share (pence) attributable to owners of the parent
during the year:
2025 2024
Basic (13.29)p 4.47p
Adjusted 3.83p 5.16p
Diluted (13.29)p 4.43p
The exercise price of all share options granted at 31 December 2025 were below
the average market share of ordinary shares during the period to 31 December
2025 and therefore deemed dilutive.
There is no other comprehensive income or expense in the current year or prior
year and consequently no statement of other comprehensive income or expense
has been presented.
All activity in 2025 relating to continuing operations.
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 not to present the parent Company income statement. The
profit for the Company is detailed in the Statement of financial position and
the Company statement of changes in shareholders' equity.
Consolidated statement of changes in equity for the year ended 31 December 2025
Share capital Treasury shares Share based payment reserves Retained earnings Total
£'000 £'000 £'000 £'000 £'000
At 1 January 2024 424 (252) 117 2,974 3,263
Dividend to shareholders - - - (246) (246)
Repatriation of unclaimed dividends - - - 24 24
Share based payment charge - - 29 - 29
Transactions with shareholders in the period - - 29 (222) (193)
Total comprehensive income (profit for the year) - - - 366 366
At 31 December 2024 424 (252) 146 3,118 3,436
Dividend to shareholders - - - (264) (264)
Purchase of own shares - (215) - - (215)
Share based payment charge - - 6 - 6
Transactions with shareholders in the period - (215) 6 (264) (473)
Total comprehensive income (profit for the year) - - - (1,081) (1,081)
At 31 December 2025 424 (467) 152 1,773 1,882
Company statement of changes in equity for the year ended 31 December 2025
Share capital Treasury shares Share based payment reserves Retained earnings Total
£'000 £'000 £'000 £'000 £'000
At 1 January 2024 424 - 117 218 507
Dividend to shareholders - - - (246) (246)
Repatriation of unclaimed dividends - - - 24 24
Share based payment charge - - 29 - 29
Transactions with shareholders - (252) 29 (222) (193)
Total comprehensive income (profit for the year) - - - 576 576
At 31 December 2024 424 (252) 146 572 890
Dividend to shareholders - - - (264) (264)
Purchase of own shares - (215) - - (215)
Share based payment charge - - 6 - 6
Transactions with shareholders - (215) 6 (264) (473)
Total comprehensive income (profit for the year) - - - 766 766
At 31 December 2025 424 (467) 152 1,074 1,183
Consolidated and Company statements of financial position as at 31 December
2025
Group Company
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Non-current assets
Intangible assets 204 1,288 - -
Investments - - 125 119
Property, plant and equipment EQUIPMENTEQUIPMENTEQUIPMENT 151 108 - -
EQUIPMENTequipment
Right-of-use assets 573 180 - -
Deferred tax assets 111 9 2 9
Trade and other receivables 119 88 - -
1,158 1,673 127 128
Current assets
Inventories 708 992 - -
Trade and other receivables 1,136 1,650 5 2
Corporation tax receivable 84 87 - -
Cash and cash equivalents 2,493 2,918 1,166 1,240
4,421 5,647 1,171 1,242
Total assets 5,579 7,320 1,298 1,370
Current liabilities
Trade and other payables 1,134 1,383 115 480
Borrowings 155 - - -
Contract liabilities 1,733 2,018 - -
Lease liabilities 158 91 - -
3,180 3,492 115 480
Non-current liabilities
Deferred tax liabilities 8 170 - -
Contract liabilities 101 148 - -
Lease liabilities 408 74 - -
517 392 - -
Total liabilities 3,697 3,884 115 480
Consolidated and Company statement of financial position as at 31 December 2025 (continued)
Group Company
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Capital and reserves attributable
to owners of the parent
Retained earnings 1,773 3,118 1,074 572
Share capital 424 424 424 424
Treasury shares (467) (252) (467) (252)
Share based payment reserve 152 146 152 146
Total equity 1,882 3,436 1,183 890
Total equity and liabilities 5,579 7,320 1,298 1,370
Consolidated and Company cash flow statement for the year ended 31 December 2025
Group Company
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Operating activities
Operating (loss)/profit (1,397) 322 10 (31)
Adjustments for:
Depreciation 198 243 - -
Amortisation 561 534 - -
Impairment of intangible assets 1,182
Share-based payment provision 6 29 6 5
Movement in:
Inventories 284 161 - -
Trade and other receivables 483 (539) 3 237
Trade and other payables and contract liabilities (581) 290 (377) 359
Cash generated from/(used in) operations 736 1,040 (358) 570
Interest received 76 79 13 -
Interest paid (20) (13) - -
Net cash generated from operating activities 792 1,106 (345) 570
Investing activities
Addition of intangible assets (659) (684) - -
Purchase of property, plant and equipment (90) (89) - -
Net cash used in investing activities (749) (773) - -
Financing activities
Dividend paid to shareholders (264) (246) (264) (246)
Repatriation of unclaimed dividends - 24 - 24
Purchase of own shares (215) - (215) -
Dividend received from subsidiary - - 750 600
Principal elements of lease payments (144) (198) - -
Net cash (used)/generated from financing activities (623) (420) 271 378
Net (decrease)/increase in cash and cash equivalents (580) (87) (74) 948
Cash and cash equivalents at start of the year 2,918 3,005 1,240 292
Cash and cash equivalents at end of the year 2,338 2,918 1,166 1,240
1 General information
Touchstar plc (the 'Company') and its subsidiaries (together 'the Group')
design and build rugged mobile computing devices and develop software
solutions used in a wide variety of field-based delivery, logistics and
service applications. The Company is a public company limited by share capital
incorporated and domiciled in the United Kingdom. The Company's are traded on
AIM. The address of its registered office is 1 George Square, Glasgow, G2 1AL.
2 Basis of preparation
The final results for the year ended 31 December 2025 have been prepared in
accordance with the accounting policies set out in the annual report and the
accounts for the year ended 31 December 2024.
The Group Financial Statements have been prepared in accordance with the
International Financial Reporting Standards ('IFRS') as adopted by the United
Kingdom, IFRS IC interpretations and the Companies Act 2006 applicable to
companies reporting under IFRSs and the AIM Rules for Companies. The Group
Financial Statements have been prepared under the historical cost convention.
While the financial information included in this final announcement has been
computed in accordance with IFRS, this announcement does not itself contain
sufficient information to comply with IFRS. The accounting policies used in
preparation of this final announcement have remained unchanged from those set
out in the Group's 2024 statutory financial statements other than those
described below. They are also consistent with those in the Group's
statutory financial statements for the year ended 31 December 2025 which have
yet to be published. The final results for the year ended 31 December 2025
were approved by the Board of Directors on 5 May 2025.
The financial information set out in this final announcement does not
constitute the Group's statutory financial statements for the year ended 31
December 2025 but is derived from those financial statements which were
approved by the Board of Directors on 5 May 2025. The Auditors have reported
on the Group's statutory financial statements and their report was unqualified
and (ii) did not contain a statement under section 498(2) or 498(3) Companies
Act 2006. The statutory financial statements for the year ended 31 December
2025 have not yet been delivered to the Registrar of Companies and will be
delivered following the Company's Annual General Meeting.
The comparative figures are derived from the Group's statutory financial
statements for the year ended 31 December 2025 which carried an unqualified
audit report, did not contain a statement under section 498(2) or 498(3)
Companies Act 2006 and have been filed with the Registrar of Companies.
Going concern
These financial statements have been prepared on a going concern basis, which
assumes that the Group will be able to meet its liabilities when they fall
due. As of 31 December 2025, the Group held unencumbered cash of £2,338,000
(2024: £2,919,000), after considering overdraft balances. The Group still
holds an undrawn £200,000 on demand overdraft facility as of 31 December 2025
(also £nil in April 2026).
The Group enters 2026 following a year of significant organisational
transformation. Under the leadership of the new CEO, Lynden Jones, the Group
implemented a structured reorganisation designed to improve operational
efficiency, strengthen cross‑functional collaboration, and embed clearer
accountability across all business units.
While these changes temporarily impacted reported results for FY25, they
represent a deliberate investment in the Group's long‑term capability and
competitiveness. The Group remains financially resilient, with a strong
balance sheet, a high‑quality recurring revenue base, and a disciplined
approach to cost management.
Management recognises that 2026 will continue to be a transition year,
characterised by both macroeconomic uncertainty and opportunities driven by
evolving customer needs and technology. With increased commercial focus,
targeted investment, and a more streamlined operating model, the Group is well
positioned to respond.
The directors remain confident in the business, the skillset employed in its
dedicated staff, its solid product set and loyal customer base.
The Group continues to benefit from a supportive bank which has provided the
borrowing facility since 2005. The Group has removed its reliance on the
facility provided by the bank and since early 2023 has an average of
£1,200,000 placed on medium term deposit thereby generating cash via
receivable interest. In assessing the Company's ability to continue as a going
concern, the Board has reviewed the Group's cash flow and profit forecasts
removing completely reliance on any facilities. The impact of potential risks
and related sensitivities to the forecasts were considered in assessing the
likelihood of additional facilities being required in the future.
The directors have at the time of approving the financial statements, a
reasonable expectation that the company has adequate resources to continue in
operational existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the financial statements.
3 Critical accounting estimates and judgements
The Group and Company makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom equal the
related actual results. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
(a) Development expenditure
The Group recognises costs incurred on development projects as an intangible
asset which satisfies the requirements of IAS 38. The calculation of the costs
incurred includes the percentage of time spent by certain employees on the
development project. The decision whether to capitalise and how to determine
the period of economic benefit of a development project requires an assessment
of the commercial viability of the project and the prospect of selling the
project to new or existing customers.
(b) Impairment of intangibles
As part of the detailed assessment completed in November 2025, management
reviewed the Group's capitalised development costs and the expected future
economic benefits associated with each project. This review formed part of the
Group's normal impairment assessment process and required significant
judgement in determining whether the carrying amounts of these assets remained
recoverable.
The impairment evaluation involved estimating the recoverable amount of the
relevant assets, based on the higher of value in use and fair value less costs
of disposal. These calculations require management to make a number of key
estimates, including projected future cash flows and the expected useful life
of the assets. Changes in these assumptions could materially affect the
recoverable amount and therefore the level of impairment recognised.
Judgement was also required in assessing whether previously capitalised
development expenditure continued to meet the criteria for recognition under
the accounting standards. Where the November 2025 assessment indicated that
the anticipated economic benefits were no longer sufficient to support the
carrying value, an impairment was recognised.
(c) Stock provisions
Judgement is required in relation to the appropriate provision to be made for
the write down of slow moving or obsolete inventory. Such provisions are made
based on the assessment of the Group's prospective sale of inventories and
their net realisable value, which are subject to estimation uncertainty.
4 Analysis of revenue
2025 2024
£'000 £'000
Recognised at a point in time 3,612 3,842
Recognised over time (recurring revenue) 3,209 3,051
6,821 6,893
5 Exceptional costs
Exceptional costs recognised in the year relate to non‑recurring items
arising from the Group strategic review and restructuring including the
impairment of the intangible assets (note 15). These costs are not considered
reflective of the Company's underlying operating performance.
These items are considered exceptional due to their size, nature, and
non‑recurring characteristics. They have been presented separately to
provide a clearer understanding of the Company's underlying financial
performance for the year.
2025 2024
£'000 £'000
Cost of the Strategic review (3) 57
Impairment of intangible assets (note 15) 1,181 -
Restructuring and integration costs 215 -
1,393 57
6 Income tax credit
2025 2024
£'000 £'000
Corporation tax
Current tax credit - (87)
Adjustment in respect of prior years 4 18
Deferred tax (credit)/charge (264) 91
(260) 22
Corporation tax is calculated at a rate of 25% (2024: 25%) of the estimated
assessable profit for the year.
Factors affecting the tax credit for the year
The charge for the year can be reconciled to the reported profit as follows:
2025 2024
£'000 £'000
(Loss)/profit before income tax (1,341) 388
Multiplied by the calculated standard rate of corporation tax in the UK of 25% (335) 97
(2024: 25%)
Effects of:
Items not deductible for tax purposes - 8
Enhanced research and development deduction (65) (201)
Surrender of tax losses for R&D tax credit - 131
Losses recognised in the period - 7
Use of previously recognised losses (28) (46)
Use of previously unrecognised losses - (32)
Difference between writing-down allowances and depreciation 164 40
Adjustment in respect of prior years 4 18
Total tax (credit)/charge for the year (260) 22
.
Factors affecting the future tax charge
There are no factors currently affecting the future tax charge.
7 Dividends
During the year an interim dividend of 1.75p per share was paid (2024: 1.5p).
The board recommends a final dividend of 1.5p per share (2024: 1.5p). Together
with the interim dividend of 1.75p, paid in November 2025, gives a total
dividend for the year of 3.25p (2024: 3.0p).
8 Earnings per share
The calculation of earnings per share is based on profit attributable to
owners of the parent and the
weighted average number of ordinary shares in issue during the year.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares arising from share options granted to employees where the exercise
price is less than the market price of the Company's ordinary shares at the
year end.
2025 2024
Pence per share Pence per share
Basic (13.29)p 4.47p
Adjusted 3.83p 5.16p
Diluted (13.29)p 4.43p
Reconciliations of the earnings and weighted average number of shares used in
the calculation are set out below:
2025 2024
£'000 £'000
Basic earnings attributable to owners of the parent - for Basic EPS (1,081) 366
Exceptional costs (note 5) 1,393 57
Adjusted earnings attributable to owners of the parent - for Adjusted EPS 312 423
2025 2024
No. No.
Basic weighted average number of shares, excluding own shares, in issue 8,129,096 8,200,077
Dilutive effect of share options 13,887 62,479
Dilutive weighted average number of shares, excluding own shares, in issue 8,142,983 8,262,556
9 Intangible assets
Group
Goodwill Development expenditure Total
£'000 £'000 £'000
Cost
At 1 January 2024 8,591 4,182 12,773
Additions - 684 684
Disposal - (587) (587)
At 31 December 2024 8,591 4,279 12,870
Additions - 659 659
Disposal - (4,217) (4,217)
At 31 December 2025 8,591 721 9,312
Accumulated amortisation
At 1 January 2024 8,591 3,045 11,636
Amortisation charge - 534 534
Disposal - (587) (587)
At 31 December 2024 8,591 2,992 11,583
Amortisation charge - 561 561
Disposal - (4,217) (4,217)
Impairment - 1,181 1,181
At 31 December 2025 8,591 517 9,108
Net book value
At 31 December 2025 - 204 204
At 31 December 2024 - 1,288 1,288
At 1 January 2024 - 1,137 1,137
Amortisation of £561,000 (2024: £534,000) is included within administrative
expenses in the income statement.
Development expenditure
The calculation of the costs incurred includes third party developers along
with the percentage of time spent by certain employees on hardware and
software development for deployment in business operations. The decision
whether to capitalise and how to determine the period of economic benefit of a
development project requires an assessment of the commercial viability of the
project and the prospect of selling the project to new or existing customers.
Management determined budgeted sales growth based on historic performance and
its expectations of market development via each product set's underlying
pipeline.
During the year the Group completed a strategic review of its software
development activities and product roadmap. Following this review, management
determined that the Group's historic development model, which supported
capitalisation of internal and external development costs and amortisation
over four years, no longer reflects the pattern of expected economic benefit.
The Group has transitioned to a continual‑iteration development model in
which updates and enhancements rapidly supersede prior versions. Customers
have also been migrated to recent software versions, with legacy versions no
longer supported or capable of generating future economic benefit.
In accordance with IAS 36, management performed an impairment review of all
capitalised software assets. The key assumptions used in the assessment were
the allocation of revenue and costs to the software assets where impairment
indicators were identified and the time-frame cash flow forecasts were
assessed of 12 months.
Whilst different allocations of costs could have led to a material asset still
being recorded on the balance sheet. The Directors consider that the estimates
used in determining the impairment charge represent the most appropriate
assumptions based on the information available at the reporting date.
An impairment charge of £1,181,000 has therefore been recognised in the
period.
Remaining development expenditure relating to hardware continues to be
capitalised on an ongoing basis and therefore has a remaining useful economic
life ranging from 0 to 5 years.
10 Property, plant and equipment
Plant and machinery Fixtures, fittings, tools and equipment
Total £'000
£'000 £'000
Cost
At 1 January 2024 243 346 589
Additions 65 24 89
At 31 December 2024 308 370 678
Additions 50 40 90
Disposals - (28) (28)
At 31 December 2025 358 382 740
Accumulated depreciation
At 1 January 2024 209 314 523
Charge for the year 27 20 47
At 31 December 2024 236 334 570
Charge for the year 28 19 47
Disposals - (28) (28)
At 31 December 2025 264 325 589
Net book value
At 31 December 2025 94 57 151
At 31 December 2024 72 36 108
At 1 January 2024 34 32 66
Depreciation expenditure of £47,000 (2024: £47,000) is included within
administrative expenses in the income statement.
11 IFRS 16 Right of use assets
Premises Motor vehicles
Total £'000
£'000 £'000
Cost
At 1 January 2024 510 358 868
Additions - 152 152
Disposals (510) (217) (727)
At 31 December 2024 - 293 293
Additions 492 52 544
Disposal - (59) (59)
At 31 December 2025 492 286 778
Accumulated depreciation
At 1 January 2024 409 234 643
Charge for the year 92 104 196
Disposals (501) (225) (726)
At 31 December 2024 - 113 113
Charge for the year 55 96 151
Disposal - (59) (59)
At 31 December 2025 55 150 205
Net book value
At 31 December 2025 437 136 573
At 31 December 2024 - 180 180
At 1 January 2024 101 124 225
The Manchester lease expired in December 2024 and rolled over under the
Landlord and Tenant Act 1985 this lease was renewed on similar terms in April
2025. The lease for East Sussex expired in December 2024 and was vacated with
the team being relocated to shared offices on a short-term rental.
Depreciation expenditure of £151,000 (2024: £196,000) is included within
administrative expenses in the income statement.
12 Deferred tax
12.1 Deferred tax asset
Group Company
2025 2024 2025 2024
£'000 £'000 £'000 £'000
At 1 January 9 20 9 2
Credited/(charged) to income statement 102 (11) (7) 7
At 31 December 111 9 2 9
The deferred tax asset for the Group relates to unused tax losses of £650,000
(2024: £600,000).
The Group has an unrecognised deferred tax asset of £330,000 (2024:
£537,000) in relation to unused tax losses. This has not been recognised as
the Group considers there is uncertainty as to when the losses will be
realised in future years.
12.2 Deferred tax liability
2025 2024
£'000 £'000
At 1 January 170 90
Credited/(charged) to income statement (162) 80
At 31 December 8 170
Deferred tax (liability)/asset analysis:
2025 2024
£'000 £'000
Amount in respect of fixed assets (8) (170)
Amount in respect of losses 111 9
13 Cash and cash equivalents
Group Company
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Cash at bank and in hand 2,493 2,918 1,166 1,240
Less: bank overdraft (note 25) (155) - - -
2,338 2,918 1,166 1,240
The above balances are not offset in the Consolidated Statement of Financial
Position and are included for illustrative purposes only.
The Company holds cash on deposit included as cash and cash equivalents. The
amount held on 32-day notice deposit at 31 December 2025 was £1,291,000
earning interest at a rate of 4.3% per annum (2024: £1,030,000 on 95-day
notice at a rate of 3.55% per annum) The Group bank overdraft facility is
secured by a bond and floating charge over the entire assets of the Group.
The carrying amounts of borrowings approximate to their fair value due to
their short-term maturity, meaning that the impact of discounting is not
significant. The carrying amounts of the Group's borrowings are denominated
solely in sterling.
The Group bank overdraft facility is secured by a bond and floating charge
over the entire assets of the Group.
At 31 December 2025, the Group had total committed undrawn facilities of
£200,000 (2024: £200,000).
The Group now operates within a £200,000 net overdraft facility which takes
into account both the gross cash position of each Group entity netted off
against any borrowings. As at the 31 December 2025, this represents the net
cash and cash equivalents balance of £2,338,000 (2024: £2,918,000) in Note
23.
The Company and its subsidiaries have given a guarantee in relation to the
overdraft facilities extended to The Group.
14 Reserves
14.1 The following describes the nature of each reserve within equity:
Reserve Description and purpose
Share-based payment reserve Provision for options granted under the Group Enterprise Management Incentive
Scheme.
Retained earnings All other net gains and losses and transactions with owners (e.g. dividends)
not recognised elsewhere.
Treasury shares Weighted average cost of own shares held in treasury.
14.2 The following describes the nature of each transaction within equity:
Reserve transactions Description and purpose
Purchase of own shares At the 31 December 2025 the Group held 553,583 of its own shares with a fair
value of £467,000, these are being held in treasury (2024: 275,000 with a
fair value of £252,000). 278,583 shares were repurchased during the year at a
fair value of £215,000 (2024: nil repurchased).
15 Share capital
Group and Company
2025 2025 2024 2024
Number £'000 Number £'000
Ordinary shares of 5p each 8,475,077 424 8,475,077 424
All shares are authorised, issued and fully paid up.
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