REG - Touchstar PLC - Trading Update

TouchstarAnnouncement

23/01/2023 07:00

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RNS Number : 4578N  Touchstar PLC  23 January 2023

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

(the "Company", "Touchstar" or the "Group")

 

Full year trading update for the year ended 31 December 2022

 

Revenue and profits in line, net cash generation and EBITDA ahead of
expectations

New order intake continued to build throughout 2022

Increased confidence in the outlook for 2023

Strong financial position creates opportunity to accelerate our long-term
growth rate

 

Touchstar plc (AIM: TST), suppliers of mobile data computing solutions and
managed services to a variety of industrial sectors, is pleased to announce a
trading update for the year ended 31 December 2022 ("FY22").

 

Trading update and financial position

The unaudited full year outcome for FY22 is expected to be in line with market
expectations at the revenue and profit before tax levels, ahead of market
expectations in terms of  EBITDA, and significantly ahead in terms of net
cash generation.

 

The Board anticipates:

o  revenue growth of over 10% compared to FY21;

o  recurring revenue to account for 40% of total revenue in (FY21:38%)

o  further upward progression in margin;

o  EBITDA growth of over 25%;

o  profit before tax to be 100% higher than FY21;

o  net cash generation to be considerably stronger than expected;

o  a year end cash balance of £3.5m (31 December 2021:£2.5m);

o  £2.4m of new orders received in Q4 2022, across a broad range of sectors;
and

o  order book at year end of £1.7m (31 December 2021: £0.6m).

 

Current trading and outlook for 2023

The buoyant level of the current order book and trading momentum underpin the
prospects for 2023 and gives the Directors increasing confidence for 2023. It
supports the expectation for another year of improved financial performance
with the group well placed to deliver:

o further growth in total revenue;

o recurring revenue that is over 40% of total revenues;

o  maintained healthy margins; and

o  strong underlying net cash generation.

 

Strategic advancement in 2023

The short-term attention of the business is upon delivery of excellent service
to our customers, meeting the expectations we have set ourselves and creating
a vibrant environment for the development of our employees.

 

With the level of cash we have and with cash generation also becoming more
predictable, we are now accelerating investment in the long-term organic
growth potential of the business by seeking to:

o  increase sales through increased innovation of our products and solutions;

o  expand into new territories through development of local relationships and
partnerships;

o  put in place the skills and structure to tender for larger, complex
contracts; and

o  enter into new vertical sectors by adaption of existing products and
solutions.

 

In addition we will consider complementary bolt on acquisitions.

 

 

Ian Martin, Chairman, commented:

"Touchstar has made substantial progress in 2022, I am extremely grateful to
the team that have made these excellent results possible. Our commitment is to
capitalise upon this hard work and success to become a better more valuable
business."

 

Touchstar expects to report its final results for the year ended 31 December
2022 in late April 2023.

 

For further information, please contact:

  Touchstar plc                                 www.touchstarplc.com (http://www.touchstarplc.com)

 Ian Martin                                     0161 874 5050

 Mark Hardy                                     0161 874 5050

 WH Ireland - Nominated Adviser & Broker        www.whirelandcb.com (http://www.whirelandplc.com/)

 Corporate Finance - Mike Coe/Sarah Mather      020 7220 1666

 

Information on Touchstar plc can be seen at: www.touchstarplc.com
(http://www.touchstarplc.com)

 

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